Political Support for Reforms: Economics of Voting in Transition Countries

Abstract

I analyze the relationship between economics and politics across eight parliamentary elections in four transition countries, the Czech Republic, Hungary, Poland and Slovakia, using regional data (election results and socio-economic characteristics at county level). I argue that support for reform reflects the balance between positive and negative effects of the reform. Accordingly, I identify economic groups that support or oppose the reform. The former are private entrepreneurs, white collar workers and university educated voters. The latter are the unemployed, retirees, and blue collar and agricultural workers. This general pattern holds both within countries and across countries, and across tenures of different governments. An intriguing result of my analysis is that the voters in the transition countries are found to be forward looking rather than retrospective. They cast their votes for the party, which they expect to maximize their future utility, based on the perceived stance of that party toward further reforms. Accordingly, the winners of reform vote for the pro-reform, right wing parties, whereas the losers of reform support the left wing parties, regardless of which party is currently in the government. This stands in contrast with the result typically obtained for the developed countries-the so-called responsibility hypothesis-that voters are retrospective and punish the government for bad economic performance.