Reversal of fortune for political incumbents after oil shocks

Arezki, Rabah, Djankov, Simeon, Nguyen, Ha and Yotzov, Ivan (2020) Reversal of fortune for political incumbents after oil shocks. Financial Markets Group Discussion Papers (805). Financial Markets Group, The London School of Economics and Political Science, London, UK.

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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.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.fmg.ac.uk/
Additional Information:	© 2020 The Authors
Divisions:	Financial Markets Group
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance
JEL classification:	D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E21 - Macroeconomics: Consumption; Saving; Aggregate Physical and Financial Consumer Wealth P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy
Date Deposited:	23 May 2023 13:54
Last Modified:	16 Sep 2023 00:00
URI:	http://eprints.lse.ac.uk/id/eprint/118898

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