Political parties’ ideological bias and convergence in economic outcomes

Zeeshan Hashim, Jan Fidrmuc () and Sugata Ghosh
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Zeeshan Hashim: Brunel University London [Uxbridge]
Jan Fidrmuc: LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique
Sugata Ghosh: Brunel University London [Uxbridge]

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Abstract: In democracies, policies are jointly shaped by voters' preferences and politicians' (or parties') ideological biases. We explore the relative importance of the latter on some key economic outcomes – growth rate, inflation and inequality – in a broad sample of 71 democracies from 1995 to 2019. We find evidence that both left-wing and right-wing governments deliver convergent outcomes as regards growth, inflation and inequality. The same applies to the policy outcome of economic freedom. This indicates that consolidated democracies maintain continuity in economic policies, and a change in government from one political ideology to another with a different ideology does not significantly alter economic policy outcomes. However, we find divergence in hybrid regimes; inequality and economic freedom are reduced under leftist governments, and economic freedom is enhanced by rightist governments.

Date: 2025-04
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Published in European Journal of Political Economy, 2025, 87, pp.102669. ⟨10.1016/j.ejpoleco.2025.102669⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05108116

DOI: 10.1016/j.ejpoleco.2025.102669

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