The Great Recession and Electoral Politics, 2007–2016

This chapter reviews the political and economic context of the global financial crisis (GFC). We first examine the origins and immediate effects of the GFC and the ‘Great Recession’ that it spawned. Ranging beyond the European focus of the research so far, we examine the impact of the crisis across the member countries of the OECD and the ways in which that variation is shaping the contexts of individual-level behaviour. We then examine patterns of electoral volatility and the changing nature of party systems before turning to consider the reasons why some governments were defeated and why others survived. Across these outcomes, analyses show that the impact of economic factors on political outcomes varied depending on their timing: before, during, or after the GFC. The chapter concludes by introducing our main sources of data: cross-sectional individual-level survey data from twenty-five national elections in OECD democracies from 2011 to 2016 sourced from Module 4 of the Comparative Study of Electoral Systems (CSES); macro-data for thirty-five OECD democracies from 1990 to 2016; and a pooled set of 113 post-election surveys from twenty-four OECD countries between 1996 and 2017.

Shaping their own Destiny

Did the GFC and Great Recession reshape how voters choose among party policy offerings? In this chapter we show that, since 2008, electoral support for the mainstream parties on the centre-left and centre-right has waned, while challenger parties have grown. Multivariate analyses of election returns trace some of this shift in party support to the effects to the policies of austerity and to the accumulation of public debt. The ideological implications of the crisis era for support among the political mainstream are less apparent but a consideration of elite cues produces a ‘crisis effect’. This effect, however, is shaped by the policy environment. Voting for the mainstream left declines, especially in settings of fiscal austerity. Furthermore, the relative effects of these settings vary with time. Short-term fiscal efforts in the form of stimulus or austerity did much to sway voters during the shock years of 2008 and 2009. With time, however, the impact of these short-term efforts weakened. In the longer run, we find that policy rhetoric can prop up support for the left and for challengers during continued hard times.

Mass Politics in a Post-Crisis World

This chapter summarizes our main arguments in light of the evidence. Implications of this book for the study of the welfare state and for electoral change are discussed. We extend our analyses to consider whether and how elite actions and cues link crisis periods to attitudes towards how democracy works. We conclude noting that inasmuch as ‘crisis times’ interrupt ‘normal times’, the lessons from our book should speak to mass politics in representative democracies for decades to come.

There is No Difference?

The global financial crisis could affect electoral turnout in two ways: by affecting the level of turnout, accelerating predominantly downward trends in most—but not all—OECD democracies; and by changing the composition of turnout, reducing turnout among the economically vulnerable, or among those most cognitively equipped to appreciate the constraining consequence of crisis. In this chapter we test the effect of perceptions that governments lacked agency, acting as ‘middle managers’ obliged to do the bidding of financial markets or lenders of last resort, their partisan histories making ‘no difference’ to their policy choices. Analyses of aggregate and individual-level data show that the depth or persistence of the crisis had little effect on turnout. Instead, we support our argument of elite conditioning by pointing to the policy choices of governments and most notably the effects of accumulation of government debt. Countries assuming higher and higher levels of debt were more likely to experience turnout decline, and at least half the effects of debt were the result of perceptions of policy ineffectiveness. Within those countries the young, those on lower incomes, the less educated, and the less politically knowledgeable were the most affected, confirming a compositional effect affecting the most vulnerable.

Revising the Bargain?

This chapter examines the effect of the GFC on mass policy preferences. We argue that preferences are not only shaped by the individual’s position in the social structure, but also by the set of feasible options provided by competing political elites. The theory of constrained partisanship views public policy preferences as rooted in institutions, economic circumstances, and past policy legacies. Parting ways with this view, we argue that parties can shape citizens’ preferences through policy efforts and rhetoric. We test a set of arguments on preferences for spending in two areas: health care (a universal benefit) and unemployment assistance (a targeted benefit). Consistent with other research, we find that individual-level attributes associated with labour market positions, skills, and wealth inform policy preferences. But party politics also mattered. Both the depth of the crisis and the extent of the recovery shaped some post-GFC policy demands by way of party cues. We also show that the scope of the crisis recovery influenced how preferences react to past policy efforts. In strong recoveries, there was a strong negative thermostatic relationship, but in weak recoveries, path dependence ruled. Implications for policy responsiveness are discussed.

Breaking the Bargain?

In the wake of the Global Financial Crisis (GFC) and the Great Recession that followed, insecurity emerged as a central theme in elections across the developed democracies. But what drives feelings of insecurity? In this chapter we show that mass perceptions of economic precariousness are shaped not only by individual- and macro-level economic conditions but by political elites as well. Elites take action to buffer the effects of economic downturn through concrete policy efforts. Politicians and party leaders can also help calm insecure voters through their messages, speeches, and rhetoric. Statistical analyses of CSES data show that the financial crisis has both short-term and long-term effect on individuals’ economic perceptions. Furthermore, feelings of insecurity are shaped by elite cues. Party emphases on welfare concerns serve to moderate the impact of individual risk exposure on perceived insecurity. Chapter implications are twofold. First, a complete understanding of its political effects requires taking into account the effect of the crisis at both stages of development and recovery. And second, what matters for feelings of (in)security is less the magnitude of the crisis but elites’ ability to demonstrate an effective response.

The Shock, the Recovery, and Economic Voting Before and After the Crisis

How did the GFC influence support for political incumbents? This chapter argues that an understanding of voter response to adverse shocks requires an examination of both the depth of the shock and the competence of the policymakers’ response over the course of the recovery. Examining CSES post-election surveys of twenty-three OECD countries from 1990 to 2016, this chapter shows that, in line with the conventional economic voting argument, adverse economic conditions during the crisis negatively affect incumbent support. Supporting claims about the importance of time, we find that the effectiveness of such policy efforts depend on the stages of the crisis. The economy–incumbent link strengthened during the recovery. Results also show that the degree to which macro-economic performance influences voters’ punishment of incumbent government depends on governing parties’ policy behaviour and rhetorical messages. Larger amounts of discretionary spending mitigate the negative impact of the crisis on incumbent support. By contrast, automatic stabilizers and pro-welfare pledges have a negative or little impact. If the recovery is slow in long term, no welfare policy or political pledges can prevent voters from punishing incumbent party for poor economic performance.