Mikael Elinder, Uppsala University and IFN
Henrik Jordahl, IFN
Panu Poutvaara, University of Munich and ifo
Theoretical background
Economic voting
Pocketbook (egotropic) voting
Sociotropic voting
Models of redistributive politics:
Models of general economic
performance:
Meltzer and Richard (1981)
Lindbeck and Weibull (1987)
Dixit and Londregan (1996)
Key (1966)
Rogoff and Sibert (1988)
Theoretical background II
Prospective voting
Retrospective voting
Citizens vote according to:
promises and election
platforms
Citizens vote according to:
Economic performance and
implemented policies
Persson and Tabellini (2000)
Pre- and post-election models of politics
Pre-election politics
Post-election politics
Competition between the
government and opposition
Focus on government policy
Platforms are assumed to be
binding
Opposition is passive
Sanction and selection
models
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
Personal or national economic
situation?
Election promises or implemented
policies?
Hypotheses
Prospective pocketbook voting:
If a party promises to increase (cut) transfers to
a group of voters, it will gain (lose) votes from this
group.
Retrospective pocketbook voting:
If a party has increased (cut) transfers to a group
of voters while in government, it will gain (lose)
votes from this group.
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study two high stakes reforms in Sweden
compare similar groups that are treated
differently (Difference-in-Differences
approach)
f
use high quality data on
individual voting
link policy platforms, individual gains, and
voting
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Severe economic downturn under center-right Government
1991-1994
How to deal with the budget crisis was a major issue in the 1994
election campaign
Center-right parties
◦ Cut pension benefits
f
◦ Be tougher on tax evasion and social welfare fraud

Social Democrats
◦ Abolish child raising allowances
◦ Day of qualification when caring for sick children
◦ Reduce compensation in parental insurance from
◦ 90 to 80%
SDP election manifesto of 1998
A surprise one month before Election Day:
“…we would like to implement a cap on child care
fees in the entire country at SEK 700 [€78, per
month] for the first child and with lower fees for
subsequent children. The reduction in child care
fees should be at least SEK 200 [€22] for
everyone.“
Average gain was >100 Euro, per month
net of tax!
Timing of election promises and
their implementation
1995: Abolishment of child care
allowances.
1995, 1996: Reductions of
compensation in parental
insurance.
SDP proposes reductions in
public support for families with
young children.
Sep 1994: Election.
SDP defeats the center-right
government.
Nov 2000: Parliament adopts
child care bill.
Aug 1998: SDP promises to put
a cap on child care fees.
Jan 2002: Implementation of
reformed child care fees.
Sep 1998: Election.
SDP remains in power.
Sep 2002: Election.
SDP remains in power.
Election year
1994
1998
2002
– Prospective
Negative
Positive
No response
– Retrospective
Negative
Negative
Positive
Type of voting
For parents with children aged 0–4 vs 6–11
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Swedish Election Studies
3,000 individuals in each election
Information on
◦
◦
◦
◦

Vote choice
Number and age of all children in the household
Register data on income and turnout
Background characteristics
Response rate >73%
0,7
0,6
0,5
0,4
0,3
Voters whith children aged 0 to 4
Voters whith children aged 6 to 11
0,2
0,1
0
1982
1985
1988
1991
1994
1998
2002
.7
.6
.5
.4
.3
.2
.1
0
1982
1985
1988
1991
Voters with children aged 12 to 17
1994
1998
2002
Voters with children aged 6 to 11
DiD estimates, left bloc
Parents with young children vs parents with older children
SDP promises to put a
cap on child care fees
20
13.5
15
10
5
0.6
1.1
0.1
0
-5
-10
-15
-8
SDP proposes reductions in
å
public support to parents with
young children r
-12.5
1988
1994
-20
1985
1991
1998
2002
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Evidence of pocketbook
voting
Prospective, election
promises matter

~13.5 percentage points higher support
among the treated ⇒ +1.5 percentage points
aggregate support for the Social Democrats
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Cost of reform: 360 million Euro/year

Cost per vote: ~4,500 Euro/year

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Majority of election promises are kept in
western democracies
Pocketbook voting likely if
- high stakes
- salient issues
Main results:
Econometric summary
Results for the Social Democratic Party
Back
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Levitt and Snyder (1997, Journal of
Political Economy) find that federal
spending in a U.S. congressional district
increases the vote share of the
congressional incumbent.
Focus on other spending than transfers.
The effect of transfers hard to evaluate as
they do not control for how the politicians
voted
Retrospective effects; no study on
promises
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Richter (2006, American Political Science
Review) studies Russian presidential
election of 1996. At that time, Russia was
undergoing a transition and a large
number of workers were not paid their
salaries
Workers whose wages were not paid in
time were less likely to vote for the
incumbent
Evidence on retrospective pocketbook
voting
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Manacorda et al. (forthcoming in American
Economic Journal: Applied Economics )
study the effects of a short-term cash
transfer to the poor on support for the
government in opinion polls
Use of a discontinuity in the assignment of
cash transfers to establish
Beneficiary households were more likely to
support the government in Uruguay
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Lewis-Beck, Michael S. and Mary
Stegmaier. 2007. “Economic models of
voting.” In Russell Dalton and Hans-Dieter
Klingemann (eds.), The Oxford Handbook
of Political Behavior. Oxford: Oxford
University Press: 518–537.
Review of 400 studies on economic voting.
Only weak evidence on pocketbook voting;
potentially because of problems in testing
it in earlier literature
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In earlier literature, focus has been on
retrospective voting
Knight (2006): “Are policy platforms
capitalized into equity prices? Evidence
from the Bush/Gore 2000 Presidential
Election.” Journal of Public Economics, 90
(4–5): 751–773.
Finds that policy platforms are capitalized
into equity prices of politically sensitive
companies