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Reversal of fortune for political incumbents after oil shocks

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  • Arezki, Rabah
  • Djankov, Simeon
  • Nguyen, Ha
  • Yotzov, Ivan

Abstract

This paper explores the effect of oil shocks on electoral outcomes. Using a new polling and election dataset for 207 elections across 50 democracies, we show that oil price increases systematically lower the odds of reelection for incumbents. We verify that these shocks-which reduce consumption growth-are associated with worsening performance for incumbents in the run-up to reelection and a reversal in the leaning of the political party in power post-election.

Suggested Citation

  • Arezki, Rabah & Djankov, Simeon & Nguyen, Ha & Yotzov, Ivan, 2020. "Reversal of fortune for political incumbents after oil shocks," LSE Research Online Documents on Economics 118898, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:118898
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    More about this item

    Keywords

    elections; incumbent; oil prices; economic shocks; consumption;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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