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Do changes in terms of trade impact election outcomes?

Author

Listed:
  • Freitas, Luis V.M.
  • Menezes-Filho, Naercio
  • Komatsu, Bruno

Abstract

We investigate whether luck is a relevant factor in election outcomes by analyzing how a country’s change in terms of trade close to the election impacts the probability of reelection of the incumbent party. We draw from economic and political data on countries around the world and find that changes in the terms of trade one year before the election affect the reelection probability. Import prices are the main drivers of the result and elections in non-OECD countries are the most affected by terms of trade.

Suggested Citation

  • Freitas, Luis V.M. & Menezes-Filho, Naercio & Komatsu, Bruno, 2020. "Do changes in terms of trade impact election outcomes?," Economics Letters, Elsevier, vol. 193(C).
    • Handle: RePEc:eee:ecolet:v:193:y:2020:i:c:s0165176520301932
    DOI: 10.1016/j.econlet.2020.109291
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    References listed on IDEAS

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    1. Andrew Leigh, 2009. "Does the World Economy Swing National Elections?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(2), pages 163-181, April.
    2. Bertrand Gruss & Suhaib Kebhaj, 2019. "Commodity Terms of Trade: A New Database," IMF Working Papers 2019/021, International Monetary Fund.
    3. Angus Deaton, 1999. "Commodity Prices and Growth in Africa," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 23-40, Summer.
    4. Kayser, Mark Andreas & Peress, Michael, 2012. "Benchmarking across Borders: Electoral Accountability and the Necessity of Comparison," American Political Science Review, Cambridge University Press, vol. 106(3), pages 661-684, August.
    5. Lucas M. Novaes & Luis E. Schiumerini, 2016. "Exogenous Commodity Shocks And The Electoral Returns To Office: Evidence From Brazil," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 076, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
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    Cited by:

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    4. Umer Shahzad & Xiaoyin He & Said Muhammad, 2023. "How Terms of Trade Impact Economic Growth: The Case of the United States," SAGE Open, , vol. 13(2), pages 21582440231, May.
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    More about this item

    Keywords

    Terms of trade; Reelection; Voter rationality;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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