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Abstract
Much like Brexit, the Greek bailout referendum of 2015 could have been a watershed event that significantly affected the European Economic and Monetary Union and possibly the European Union as a whole. While the referendum did not live up to the hype, the fact remains that the Greek people decided to risk ‘exit’ and reject their international creditors’ bailout terms. In this article, we explore how the cycle of sovereign debt crisis, the externally imposed austerity and the resulting recession affected the outcome of that referendum. We further provide a limited test for the ‘left-behind’ hypothesis, which has been a prominent explanation for recent ‘unexpected’ or ‘surprising’ choices that have been made at the polls. Using municipality data and novel data sources, such as night-time light transmission, we provide aggregate-level support for our expectations.
Highlights
Political events such as the British referendum on leaving the European Union (EU) or the United States (US) presidential election of 2016 are examples of events that have astonished academics and pundits alike
The standardized regression coefficient (–0.21, not shown) suggests that one standard deviation increase in the logged NTL (0.15) would result in about 1.4% decrease of the ‘No’ vote. This means that if we moved from a municipality that has lost ‘no light’ during the crisis to a municipality that has experienced the maximum light loss (0.41), this would account for an increase of about 4% in the ‘No’ vote; not a decisive but neither a negligible quantity
National and international pressure on voters was high as were the stakes for this contest
Summary
Political events such as the British referendum on leaving the European Union (EU) or the United States (US) presidential election of 2016 are examples of events that have astonished academics and pundits alike. Keywords Financial crisis, Greek referendum 2015, night-time light data, voting We test the widely shared hypothesis that the outcome of the referendum reflects economic developments that have taken place during the 2009– 2015 Greek sovereign debt crisis.
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