The Politics of Structural Economic Change and Economic Shocks in Advanced Democracies

Abstract

This dissertation examines how structural economic changes and economic shocks affect political behavior in advanced democracies. While existing research documents diverse voter responses to economic shocks, ranging from leftward and rightward shifts to anti-incumbent voting and populist suport, we still know little about why voters responses vary so much across contexts. Three papers in this dissertation address this gap by proposing novel mechanisms through which economic shocks shape political behavior.

In the first paper, I examine the distinct political effects of transitory and permanent economic shocks. Using new measures of transitory and permanent shocks constructed from the German household panel, I show that transitory shocks increase immediate material concerns and electoral support for the radical left, whereas permanent shocks increase status concerns and electoral support for the radical right. In the second paper, I argue that party appeals shape voter responses to local deindustrialization shocks. Using British local-level data spanning five decades, I show that local economic shocks boosted electoral support for the left in the 1970s and 80s, but this pattern has disappeared since the late 1990s, when the Labour Party's apeal pivoted away from industrial areas. In the last paper, I examine the political consequences of coal phase-outs in the EU, which present an important but understudied source of economic shocks in the context of green transitions. While much attention has been paid to job losses, I show that declines in local tax revenues and rising dissatisfaction with public services are important mechanisms behind electoral backlash against pro-environment parties.

Together, these papers advance our understanding of the political consequences of structural change and economic shocks by highlighting the importance of under-explored mechanisms -- the type of economic shocks, supply-side politics, and fiscal consequences -- in shaping divergent political responses.