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The effect of election outcome on economic activity: a tale of two countries

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  • Amr Saber Algarhi

Abstract

This paper investigates the effect of partisan politics on macroeconomic performance in France and the United Kingdom between 1971-2023. Using a panel autoregressive distributed lag (ARDL) model, it examines whether ideological divides between left- and right-wing parties and coalition governments relate to accountability for key macroeconomic indicators. Results suggest that economic growth is slightly lower under the left-wing governments, whereas unemployment and inflation rates are higher with a statistically significant difference of 10% for inflation. Furthermore, coalition governments underperform on growth and unemployment, struggling to stimulate economic expansion. Finally, despite the characterization of political parties as either right or left leaning in terms of cultural matters, their implemented economic policies seem to yield comparable economic outcomes.

Suggested Citation

  • Amr Saber Algarhi, 2024. "The effect of election outcome on economic activity: a tale of two countries," Economics and Business Letters, Oviedo University Press, vol. 13(4), pages 213-221.
    • Handle: RePEc:ove:journl:aid:20833
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    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/20833
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    1. Amr Saber Algarhi & Alexander Tziamalis, 2021. "Does the UK economy grow faster under a Conservative or Labour government?," Economics and Business Letters, Oviedo University Press, vol. 10(2), pages 95-101.
    2. Fair, Ray C, 1978. "The Effect of Economic Events on Votes for President," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 159-173, May.
    3. Alan S. Blinder & Mark W. Watson, 2016. "Presidents and the US Economy: An Econometric Exploration," American Economic Review, American Economic Association, vol. 106(4), pages 1015-1045, April.
    4. Niklas Potrafke, 2012. "Political cycles and economic performance in OECD countries: empirical evidence from 1951–2006," Public Choice, Springer, vol. 150(1), pages 155-179, January.
    5. Hsiao,Cheng, 2022. "Analysis of Panel Data," Cambridge Books, Cambridge University Press, number 9781009060752, January.
    6. Hsiao,Cheng, 2022. "Analysis of Panel Data," Cambridge Books, Cambridge University Press, number 9781316512104, January.
    7. Sergiy Verstyuk, 2004. "Partisan Differences in Economic Outcomes and Corresponding Voting Behavior: Evidence from the U.S," Public Choice, Springer, vol. 120(1_2), pages 169-189, July.
    8. Pesaran, M. Hashem, 2015. "Time Series and Panel Data Econometrics," OUP Catalogue, Oxford University Press, number 9780198759980, Decembrie.
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