Are State Elections Affected by the National Economy? Evidence from Australia

Andrew Leigh () and Mark Mcleish

The Economic Record, 2009, vol. 85, issue 269, pages 210-222

Abstract: Using data from 191 Australian state elections, we test how voters respond to economic conditions. We find that unemployment has a strong impact on election outcomes, with each additional percentage point of unemployment reducing the incumbent's re-election probability by 3-5 per cent. However, when we separate luck (unemployment in other states) from competence (unemployment in that state relative to the rest of Australia), we find that both luck and competence are equally important. This is consistent with a psychological theory of the 'fundamental attribution error', in which observers consistently underestimate the importance of situational constraints. We also find evidence that unemployment driven by a clearly exogenous source - the US economy - has a non-trivial impact on the re-election probability of Australian state governments. Our results suggest that Australian voters either retain too many state governments in economic booms, vote out too many state governments in recessions, or perhaps both. Copyright © 2009 The Economic Society of Australia.

Date: 2009

Downloads: (external link)
http://www.blackwell-synergy.com/servlet/useragent ... &year=2009&part=null link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Are State Elections Affected by the National Economy? Evidence from Australia (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bla:ecorec:v:85:y:2009:i:269:p:210-222

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0249

Access Statistics for this article

The Economic Record is edited by Paul Miller, Glenn Otto and Martin Richardson

More articles in The Economic Record from The Economic Society of Australia
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().