Political economy is the distribution of political and economic powers in the society. Economics and politics are heavily influenced by political economy of their country and economic voting and economics of voting are no exception.
When we talk about economic voting we look it as a theoretical aspect arguing that at the time of elections, the behaviour of the voter is greatly affected by the economic factors and circumstances in their country.
When the economy is in a healthy state, conventionally we find voters tending to vote more in favor of the party and the incumbent candidate. Both theoretical and empirical research studies across the world democracies confirm that voting or electoral outcomes are governed or shaped by economic conditions.
That is to say that political outcomes are shaped by economic conditions and outcomes. It is because there is a great complimentarity between politics and economics. When voters find it very hard to assign economic tasks to particular candidate or parties there is very less probability for economic voting.
Economic voting defines the nexus between economics and elections thereby revisiting important studies by economic and political experts on significant inferences and generalizations applicable across democracies. Today we find leading global generalizations including sociotropic backward-looking (ex-post facto) economic appraisal dominating the economic vote preferences.
Economics of voting is beyond what is seen and observed taking account of its vast nature and scope. It combines the subject of political science and economics using applied econometric techniques.
The aim is to summarize an important body of literature so that political experts who are interested in knowing and examining the economic impact on voting can visualize the great conclusions of each work. Furthermore, they can see the key determinants of economic voting and the methodology used in each work.
Econometric analysis of voter behaviour is highly indebted to Gerald Kramer’s 1972 work who presented an explicit theoretical framework underlying his model. He reintroduced the rational actor (rational economic-political man) whose goal is maximization of his interests.
Rational Choice Theory is greatly influenced by his works which are multivariate statistical modelling of voting. Initially, it was found that elections are not affected by the fluctuations in unemployment but that elections are influenced by the fluctuations in real per capita income.
Later after much reanalysis, he realized and recommended that both income and inflation are important for analyzing voter behaviour. He discards the traditional democratic opinion of the rational voter who gathers information on past voting information, candidates’ issue positions, and party platforms.
Thereafter, he votes for candidates who will most benefit him. According to him, rational actor is the one who votes on the basis of the most easily available information comprising the past performance of the incumbent party. The rational actor will look at voting as a choice between two alternatives on economic policies and, eventually, between two alternative sets of economic circumstances.
Past economic performance is very important in analysing the elections and voter behaviour. It reflects actual policies of a party or incumbent. Therefore, in economics of voting literature review of the past political and economic policies of parties is very important. It will have dual effect: On one hand, it will add to the existing body of knowledge and on another hand, it will expand the scope of the subject-matter of economics of voting.
Economics of voting has been divided into several categories and the most important part is economic voting. Different types of voting are studied and analysed under the subject-matter of economics of voting. It comprises pocketbook voting dependent upon individual issues. Moreover, it includes sociotropic voting reliant upon the economy at large.
That is to say that it has its roots in macroeconomics while as pocketbook voting has its roots in microeconomics. As far as retrospective or backward-looking voting is concerned, it is based on the economic trends of the past as compared to the prospective or expected future economic trends.
At the time of elections, it is very necessary to do retrospective or backward-looking voting so that voter behaviour is analysed rationally. It will improve political economy of a country in general and democratic in particular. Hence, economic growth and development prospects can improve to a great extent.
Dr. Binish Qadri, former Assistant Professor, Cluster University, Srinagar