Economic Geography and Economic Voting: Evidence from the US States

If voters use information about the economy to assess the competence of incumbents, a connection between economic conditions and incumbent success should only be discernable in settings where public policy might plausibly affect the economy, and where the assignment of government responsibility is relatively straightforward. Applying this logic to United States gubernatorial elections, we test the following hypothesis: the connection between economic conditions and incumbents’ vote shares is mediated by the structure of the state economy. This hypothesis is premised on the idea that voters understand that raw macroeconomic aggregates – when driven by factors like weather, commodity prices, and federal policy – are poor signals of incumbent performance. Using data from gubernatorial elections held between 1950 and 1998, we show that the connection between macroeconomic indicators and incumbent success is weak in states dominated by natural resources and farming but quite strong elsewhere. This finding helps explain why earlier studies found no connection between state-level economic conditions and gubernatorial elections. Most politicians and pundits take it for granted that the state of the economy plays a decisive role in electoral outcomes. Invariably, they see a strong economy as a boon for an incumbent’s reelection hopes and a weak economy as a curse on them. These beliefs draw support from numerous studies that demonstrate a connection between national macroeconomic conditions in the United States and aggregate national election results (e.g., Kramer 1971; Fair 1978; Tufte 1978; Rosenstone 1983; Hibbs 1987; Erikson 1989; Holbrook 1991). However, researchers have been less successful in efforts to detect an analogous relationship between statelevel economic conditions and state-level elections. In particular, several analyses of gubernatorial elections held prior to the mid 1980s find that gubernatorial vote shares are essentially impervious to fluctuations in state economic conditions (Kenney 1983; Peltzman 1987; Chubb 1988). This finding seems especially perplexing in an era when most governors devote tremendous resources to the economic well-being and development of their states. Why would governors focus so much attention on economics if not for the electoral rewards such attention presumably bestows? In trying to resolve this empirical puzzle, we also address a general theoretical question. In what situations do economic conditions affect election outcomes? While aggregate evidence of economic voting at the national level in the United States is strong, the cross-national empirical literature is mixed. A recent review concludes that “in different samples different economic variables sometimes matter for political outcomes, but the findings are far from robust” (Cheibub and Przeworski 1999, 230). This should not be surprising, given that voters possess different information and incentives in different political systems. For instance, Powell and Whitten (1993) demonstrate that the effect of economic performance on voting is weak in countries in which “policymaking responsibility is blurred between government and opposition,” and quite strong in countries where “responsibility is more sharply focused” (410). Following a 1 Anderson (2000) provides a review of similar findings, along with further evidence of the relationship between “clarity of responsibility” and economic voting.