Center for the Study of Democracy

Economic growth and social investment has promoted significant poverty reduction and, therefore, dominated the Latin American agenda from 1995 to 2010. How does economic voting take place in this context? I suggest the effect of macroeconomic variables occur mostly indirectly, that is, macroeconomic results impact voters’ economic evaluation, which in turn determines the ruling party's electoral outcome. In this investigation, aggregated data from legislative (60) and presidential (58) elections of 18 countries were used. Growth and inflation did not have a direct impact on ruling parties' electoral outcomes, but social investment did just in case of presidential elections. Growth and social investment affected retrospective economic evaluations, which in turn affected the incumbent's electoral outcome.