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The Macroeconomy and Individuals’ Support for Democracy

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  • Friedrichsen, J.
  • Zahn, P.

Abstract

How important are national macroeconomic indicators for people’s satisfaction with democracy? This paper empirically explores the link from macroeconomic variables to support for established democratic systems. We combine country-level data on growth, inflation, and unemployment from the OECD with survey data from the Eurobarometer for nineWestern European countries for the period 1976-2001. We regress individual satisfaction with democracy on macroeconomic variables and individual controls. Our regressions include country-specific time trends as well as fixed effects for countries and surveyyears. Pooling observations from nine countries, we find that growth (inflation and unemployment) is positively (negatively) correlated with satisfaction with democracy. The effect goes beyond what can be explained by individual characteristics and is non-negligible if interpreted in light of the recent economic crisis. Our findings are robust to alternative specifications using logit and ordered logit models.

Suggested Citation

  • Friedrichsen, J. & Zahn, P., 2011. "The Macroeconomy and Individuals’ Support for Democracy," Cambridge Working Papers in Economics 1104, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1104
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    Cited by:

    1. Dominik Schraff & Frank Schimmelfennig, 2019. "Eurozone bailouts and national democracy: Detachment or resilience?," European Union Politics, , vol. 20(3), pages 361-383, September.
    2. Christian Pfeifer, 2023. "Can worker codetermination stabilize democracies? Works councils and satisfaction with democracy in Germany," Working Paper Series in Economics 420, University of Lüneburg, Institute of Economics.
    3. Georgia Kaplanoglou & Vassilis T. Rapanos & Ioanna C. Bardakas, 2015. "Does Fairness Matter for the Success of Fiscal Consolidation?," Kyklos, Wiley Blackwell, vol. 68(2), pages 197-219, May.
    4. Salih BARIŞIK & Kubilay ERGEN, 2023. "Heterogenous Effects of the Determinants of Pro-market Reforms: Panel Quantile Estimation for OECD Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 36-51, June.
    5. Selim Jurgen Ergun & M. Fernanda Rivas & Máximo Rossi, 2019. "Satisfaction with democracy in Latin America: Do the characteristics of the political system matter?," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 83(9), pages 353-383, July.
    6. Gebhard Kirchgässner, 2016. "Voting and Popularity," CESifo Working Paper Series 6182, CESifo.
    7. Gustavo Gouvêa Maciel & Luís de Sousa, 2018. "Legal Corruption and Dissatisfaction with Democracy in the European Union," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(2), pages 653-674, November.
    8. Guido Merzoni & Federico Trombetta, 2016. "The cost of doing the right thing. A model of populism with rent-seeking politicians and the economic crisis," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis1602, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    9. Gourley, Patrick & Khamis, Melanie, 2023. "It is not easy being a Green party: Green politics as a normal good," European Journal of Political Economy, Elsevier, vol. 76(C).
    10. Agnello, Luca & Castro, Vitor & Jalles, João Tovar & Sousa, Ricardo M., 2015. "What determines the likelihood of structural reforms?," European Journal of Political Economy, Elsevier, vol. 37(C), pages 129-145.
    11. Tim Friehe & Christian Pfeifer, 2024. "Predicting satisfaction with democracy in Germany using local economic conditions, social capital, and individual characteristics," Economics of Governance, Springer, vol. 25(3), pages 335-377, September.

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    More about this item

    Keywords

    Satisfaction with democracy; Economic Growth; Political Economy;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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