A New View of Political Accountability for Economic Performance

Abstract

Most political support models imply that in evaluating economic performance, voters use a standard that would provide poor predictions of the future and leave the economy vulnerable to manipulation by vote-hungry politicians. Drawing on macroeconomic theory, we develop a simple standard of evaluation which encompasses a concern not only for current economic outcomes, but also for accurately assessed future consequences of current policies. We find that political support for the president can be explained as well by models that assume that voters use this sophisticated standard as by models that assume voter naivete.Our analysis questions the wisdom of measures typically used to assess voter evaluation of economic performance in a variety of theoretical contexts. The results also help to explain the absence of convincing evidence that governments exploit voter ignorance in manipulating the economy.