Presidential Elections and the Economy 1872 to 1996: The Times They Are a 'Changin or the Song Remains the Same?

Article excerpt

Scholars have argued that economic conditions influence presidential elections because Presidents have some influence over macroeconomic performance. Most research on the impact of the economy on presidential elections has focused on the period after World War 11 because of the dramatic increase in government power over the economy from 1932 to 1946. Research on politics during the late 19th and early 20th centuries has focused more on the impact of cultural forces on elections. However, no one has tested the stability of the relationship between economic conditions and presidential elections over time to see if increases in presidential power between 1932 and 1946 increased the impact of the economy on presidential elections. In this work I test the stability of the relationship between the economy and presidential elections over time using OLS regression and F-tests to show that macroeconomic conditions have influenced presidential elections from 1872 to 1996 and that the importance of changes in GNP did increase significantly after 1946. These results concerning 1946 are consistent with previous work. I also show that government was involved in many politically important economic policies before 1946, which might also explain why economic conditions influenced presidential elections in the late 19th and early 20th century.

Economic conditions have clearly influenced U.S. presidential elections since at least the end of World War 11.1 Scholars have focused primarily on the post World War II era for two reasons. First, economic data from earlier periods was suspect. Second, political scientists assume that voters respond to economic conditions because governments play an important role in maintaining economic prosperity' The economic policymaking power of Presidents increased substantially from the beginning of the New Deal to the end of World War 11 and therefore scholars have focused on elections since then.

However, this focus on the POSt-World War 11 era raises two important questions. First, did the legal changes from 1932 to 1946 translate into electoral changes? Did economic conditions become more important in presidential elections after government authority over the economy grew with the New Deal and passage of the Employment Act of 1946? This issue is critical to models of voter rationality Second, did the economy influence presidential elections in the late 19th and early 20th century and if so why? Recent work' has measured the impact of the economy on presidential elections going back to the late 19th century, but no one has examined the stability of this relationship to see if the economy did influence elections in the late 19th and early 20th centuries. Government did help to manage economic growth, using such tools as tariff rates and monetary policy, before the Great Depression and World War 11.

Using aggregate economic data, I measure the impact of real, per capita GNP, inflation, and deflation on presidential elections between 1872 and 1996. 1 use F-tests to measure the stability of the relationship over time. I find that economic conditions have influenced U.S. presidential elections since 1872-1 however, my results also show that GNP changes became much more important in presidential elections after 1946.

The increased importance of changes in GNP on presidential elections after 1946 is consistent with the expectation that after the President's authority over the economy grew with the passage of the New Deal legislation and Employment Act of 1946 Voters held Presidents more accountable for the economy Economic conditions influencing late 19th and early 20th century presidential elections is consistent with a growing literature which argues that economic issues were important to the party systems (Brady 1988; Coleman 1996) and political debate (Ritter 1997) of the late 19th and early 20th century. There were politically important economic issues before the New Deal, and these issues may have lead voters to respond to the economy during presidential elections in the late 19th and early 20th centuries. …