Economic Vote: Portugal in the first two decades of the 21st century

Abstract

This paper examines how local economic conditions influenced government voting shares in the first two decades of the 21st century, using a panel consisting of 278 municipalities across six elections. Firstly, the statistical irrelevance of the socio-demographic variables on the incumbent electoral fortune can be highlighted. The results show that higher local unemployment reduces government vote shares, consistent with the responsibility hypothesis. Surprisingly, however, income growth appears to hurt incumbents, a result found to be exclusive to municipalities where national and local governments are politically aligned. Evidence suggest that this unexpected outcome may stem from the lingering effects of Portugal’s financial crisis and austerity measures, in which drastic cuts were initially made to incomes, leaving voters feeling dissatisfied and viewing later increases in income too small to reestablish the lost purchasing power.