Economic Trends and Government Survival in West European Parliamentary Democracies

Abstract

In this study, I investigate the linkage between trends in key economic indicators (inflation, unemployment, and growth in gross domestic product) and government survival in 16 postwar European parliamentary democracies. The partial likelihood method, which allows for variation in indicator values over the lifetimes of individual governments, constitutes the basic analytic tool. The findings reveal overall causal roles for both inflation and unemployment, as well as important differences in these roles between socialist and bourgeois governments and between pre-oil crisis and post-oil crisis eras. Most significant, the introduction of these indicators to the analysis helps to resolve the debate between two rival explanations of governmental stability, the bargaining complexity hypothesis and the ideological diversity hypothesis, in favor of the latter.