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Faculty of Economics

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Friedrichsen, J. and Zahn, P.

The Macroeconomy and Individuals' Support for Democracy

CWPE1104

Abstract: How important are national macroeconomic indicators for people's satisfaction with democracy? This paper empirically explores the link from macroeconomic variables to support for established democratic systems. We combine country-level data on growth, inflation, and unemployment from the OECD with survey data from the Eurobarometer for nineWestern European countries for the period 1976-2001. We regress individual satisfaction with democracy on macroeconomic variables and individual controls. Our regressions include country-specific time trends as well as fixed effects for countries and surveyyears. Pooling observations from nine countries, we find that growth (inflation and unemployment) is positively (negatively) correlated with satisfaction with democracy. The effect goes beyond what can be explained by individual characteristics and is non-negligible if interpreted in light of the recent economic crisis. Our findings are robust to alternative specifications using logit and ordered logit models.

Keywords: Satisfaction with democracy, Economic Growth, Political Economy

JEL Codes: H11 O42 P16

PDF: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1104.pdf

Open Access Link: https://doi.org/10.17863/CAM.1001