Financial bailouts and the decline of establishment politics

Abstract

This article identifies and tests a mechanism to explain how exposure to financial bailouts accounts for the electoral decline of establishment parties. Given the limitation of economic voting theories to fully explain the electoral shifts observed in Europe from 2010 onwards, this research develops a different explanation. Citizens who were exposed to the macroeconomic conditions of financial bailouts not only observed the consequences of drastic fiscal adjustment packages but, possibly, also underwent a process of political learning. By putting economic responsibility before policy responsiveness, establishment parties showed citizens that voting for these parties did not necessarily implied policy change. This political learning led some citizens not to vote for these parties in subsequent elections. These theoretical claims are tested using individual data from the sixth round of the European Social Survey as well as data from European and parliamentary elections observed between 1991 and 2019 in eleven countries of the Eurozone.