Political parties’ ideological bias and convergence in economic outcomes
Zeeshan Hashim,
Jan Fidrmuc and
Sugata Ghosh
European Journal of Political Economy, 2025, vol. 87, issue C
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.
Keywords: Political parties; Ideology; Economic growth; Inflation; Inequality; Economic freedom (search for similar items in EconPapers)
JEL-codes: D70 H10 O10 P50 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:87:y:2025:i:c:s0176268025000291
DOI: 10.1016/j.ejpoleco.2025.102669
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