Economic insecurity and political stability: a case for growth-targeting systemic vote

Konstantinos Matakos and Dimitrios Xefteris

Oxford Economic Papers, 2020, vol. 72, issue 3, 829-862

Abstract: In this paper, we focus on the years before the Great Recession (1960–2007) and, after addressing possible issues of endogeneity, we study the effects of economic fluctuations on political stability. We find that when the economy is not in turmoil, there is a strong positive relationship between unemployment (i.e the major macroeconomic determinant of economic insecurity) and electoral support for systemic parties (i.e. parties with a serious aspiration to governing). That is, democratic politics respond to increasing economic insecurity by enhancing the prospects of political stability and, consequently, economic prosperity and growth.

JEL-codes: C26 D72 O42 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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