Matakos, Konstantinos (2012) Essays on the economic origins of party-system structure and political participation. PhD thesis, University of Warwick.

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Abstract

This dissertation explores the economic origins of party-system structure and the
role of economic institutions in determining political outcomes and electoral partici-
pation. Chapter 2 studies the impact of unemployment on electoral fragmentation.
Employing a four-party model of redistributive politics with two dimensions of choice
(economic policy and ideology), we uncover a non-monotonic relationship between
unemployment and fragmentation. In equilibrium, big parties woo the unemployed
voters who are relatively more willing to switch their votes in response to generous
redistribution. When the tax-base is large enough, allowing for more redistribution,
an initial rise in unemployment favors the big parties by increasing the amount of
the target constituency that is up for grabs. We identify two necessary conditions
for opportunistic parties to be able to capitalize on this relationship: (i) the exis-
tence of an e¤ective public redistribution mechanism and (ii) the lack of institutional
checks and balances. Using data from OECD economies, we confirm empirically the
relationship between economic and political outcomes. We find that variation in
unemployment alone can account for two-thirds of the variation in party-system
fragmentation. Using data from Greek local elections, to exploit the information
shock, we test the role of institutional constraints in limiting opportunistic redis-
tribution and increasing fragmentation. Overall, Chapter 2 lays a theoretical and
empirical framework that relates economic outcomes with party-system structure.
It also provides a special interest politics justification for redistribution. Finally, it highlights the importance of institutional constraints and economic institutions in
guaranteeing political pluralism and power-sharing.
Chapter 3, using again data from Greek elections explores empirically the link
between economic adversity, trust and voter turnout. It identifies two links: one
normative, declining trust in the party-system, and one rationalistic, the weakening
of party-group linkages. We find that the fiscal shock caused a collapse in voter
turn-out. Moreover, the decline was larger in regions with relatively larger public
sector. Using suitable instruments from the institutional set-up of Ottoman Greece,
we document a negative relationship between economic adversity and voter turn-out
operating through both links (trust and party-group linkages). We also show that
the size of the public sector acts as a catalyst in exacerbating the e¤ects of economic
shocks on turn-out. The policy implications are clear: financial or institutional
measures that reduce the size of public sector and aim at increasing transparency,
trust and voter participation might have a second-order negative effect on turnout
by reducing party-voter linkages. For Greece, the latter effect dominates, raising
questions for the future of political participation.

Item Type:	Thesis (PhD)
Subjects:	H Social Sciences > HB Economic Theory J Political Science > JF Political institutions (General)
Library of Congress Subject Headings (LCSH):	Political participation -- Economic aspects, Political participation -- Economic aspects -- Greece, Elections -- Econometric models, Elections -- Economic aspects, Elections -- Economic aspects -- Greece, Elections -- Econometric models -- Greece
Official Date:	March 2012
Dates:	Date Event March 2012 Submitted
Institution:	University of Warwick
Theses Department:	Department of Economics
Thesis Type:	PhD
Publication Status:	Unpublished
Supervisor(s)/Advisor:	Dutta, Bhaskar; Lockwood, Ben
Sponsors:	University of Warwick; A.G. Leventis Foundation
Extent:	vii, 202 leaves : charts.
Language:	eng

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