A couple of new papers out: Danish political system + social democracy/public choice

I have a couple of new papers coming out in anthologies.  One is with my good colleague, Karina Kosiara-Pedersen, "Change and stability in the Danish party system", in M. Lisi (ed.): Party system change, the European crisis and the state of democracy. London; N.Y.: Routledge, 2018, pp. 63-79 (Routledge Studies on Political Parties and Party Systems).


Here is from the introduction:

"When looking at the Danish political system in the first decade and a half of the new millennium, it is tempting to quote Lampedusa’s words from  Il Gattopardo: That everything must change so that everything can remain the same. New parties emerged, semi-old parties disappeared but, on the surface, most things seem largely the same. Yet that would to a large extent be to ignore some quite subtle but important changes, fi rst and foremost that the “quadropoly” of the “four old parties”, which has dominated Danish politics for a century, have declined in strength and given way to a much more fragmented and multipolar party system. This change has come about gradually. There is no particular revival after the economic or immigration crises and neither does the framing of new parties indicate a link. While these crises have had an impact on the political agenda and policies, they do not seem to have had an impact on the confi guration of the Danish party system.  The historic core of the Danish party system has declined. The four old parties won nine out of ten votes prior to the earthquake election of 1973 at which they gained only 58 percent. In the period under scrutiny here, the combined electoral base of these four parties has shrunk from three out of four in 2001 and 2005 to two-thirds in 2007 and 2011 and only just over half in 2015. While they still provide a core, they simply do not dominate the party system to the same extent as they used to. This decline in the support for the oldest parties is similar across the Scandinavian countries but more marked in Denmark."

The other is my "Public choice and social democracy" in R. Congleton, B. Grofman & S. Voigt (eds.) Oxford handbook of public choice. Oxford: Oxford University Press, 2019, Vol. 1. (Oxford Handbooks). Here is the abstract:

"Since World War I, “social democracy” has been one of the most influential political ideas. It refers to a partisan political movement, an ideological orientation, and a set of political institutions. Common denominators are the extension of democracy to socioeconomic spheres and an expansion of government activities beyond those of merely providing national security, law and order, and a narrow set of public goods. However, such a program would seem problematic given a number of insights offered by public choice theory: All forms of majority decisions are sensitive to even small changes in the procedures and are likely to produce outcomes not preferred by a majority. Majority decisions also risk producing Pareto-inferior outcomes, especially when costs can be imposed on others. And the fewer constitutional limits on government activities there are, the larger the extent of rent seeking with associated welfare losses is likely to be. Together these points are significant challenges to a program that wants to extend majority decision to new spheres while simultaneously promising prosperity for all."

Too close to call (again): A "fundamentals" look at the US presidential election

Here a few days before the 2016 US presidential election I have updated my own little model (which I call "Bread & The Cost of Ruling") with the most recent data.  My model--which I have developed over the last four elections and which is inspired by somewhat different, but also slightly similar, models by Douglas Hibbs, Michael Lewis-Beck, Ray Fair and Alan Abramowitz--relies on three elements for the explanation of the two-party vote share of the incumbent party's presidential candidate:

1. Economic growth: Developments in real disposable income since the previous midterm election (presumed to be positive for the candidate); 
2. "The cost of ruling": A composite measure balancing a) the number of terms a party has held the presidency (presumed to be negative), but also considering b) whether the candidate is an incumbent (presumed to be positive);
3. Presidential approval: The incumbent president's positive approval ratings (presumed to be positive).

Applying the model (through simple OLS-regression analysis) to data for the 16 presidential elections 1952-2012 we get this statistical model:

• Constant: 40.22
• Economic Growth: 1.95
• Cost of Ruling: -1.52
• Presidential approval: 0.12

The explanatory power of the three variables together is quite strong, explaining 87% of the variation in the two-party vote 1952-2012.
 


In particular, there is the familiar picture of economic conditions playing a large role--here the correlation between economic growth and incumbent party's share of two-party vote when controlling for other factors:


Plugging in the relevant data for 2016 (3.3 pct. average quarterly growth up to and including 2Q of 2016, given that we do not yet know 3Q; 51.3% approval rating for Obama, using RealClearPolitics.com's averages), we get that the Democratic candidate for president (Hillary Clinton) should get ... (drum roll) ...  49.99% of the two-party vote.

Essentially this is as close to a coin toss as possible--although it should be noted that such a use for "prediction" comes with a caveat: In this case the standard error of the estimate (when applied to the 1948-2012 elections) is at 2.28%. 

What this means is that the election--in the eyes of the model--should look so extremely close at the national level (disregarding the issue of the Electoral College votes) that we really cannot say who is going to win.  In fact, we should not be surprised by a relatively narrow win in the national vote (with, say, a 2 pct.point margin) for either of the candidates.

This is not really what the opinion polls, the forecasting models and prediction markets suggest and have suggested all year (namely a relatively clear Clinton victory).  However, it does match the tendency in the last weeks of the presidential campaign for the national polls to tighten rather visibly.

If there was a modern presidential campaign where "the ground game" ("get out the vote"-operations) and voter enthusiasm/lack thereof might play a role, this could very well be it.

If on Tuesday Clinton ends up winning more like the opinion polls suggest than what econometric models such as the present one tends to forecast, then the "credit" might very well go to the Republicans and their candidate.