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Arezki, Djankov, Nguyen, Yotzov

Articles by Arezki, Djankov, Nguyen, Yotzov

Oil shocks and reversal of political fortunes

October 30, 2020

Voter behaviour is often said to be determined by self-interest and ideology, but empirical support for the role of ideology is mixed. There is, however, evidence that exogenous shocks can negatively affect incumbents’ electoral fortunes. This column explores the effect of oil shocks on electoral outcomes, using a new polling and election data set for 207 elections across 50 democracies. Oil price increases one year before an election systematically lower the odds of incumbents being re-elected. The winning parties are more likely to belong to the opposite end of the political spectrum from the incumbent.

The increase in gasoline prices stemming from the oil crisis overshadowed the US presidential debate of October 1980. Ronald Reagan and then-President Jimmy

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Reform chatter and democracy

August 24, 2020

It is often argued that democracy is the least imperfect form of government mainly because of the existence of a ‘self-correcting’ mechanism stemming from voice and accountability embedded in democracies. Using text analysis from about a billion newspaper articles in 28 languages, this column shows that the intensity of reform chatter increases during economic downturns and that the increase is more significant in democracies. During downturns, democracies appear to benefit disproportionately from changing popular attitudes translating into actual reforms.

The debate over the relative benefits of democracies over autocracies has become heated (Wolf 2019). Democracies are often criticised for being less responsive. It is often argued that there is an apparent

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