Academic journal article Atlantic Economic Journal

Political Party Impacts on Direct Democracy: The 2015 Greek Austerity Referendum

Academic journal article Atlantic Economic Journal

Political Party Impacts on Direct Democracy: The 2015 Greek Austerity Referendum

Article excerpt


The year 2015 was a bad year for Greece. In May of that year, Greece's national unemployment rate was nearly 25%, more than twice that of nearby Italy. (1) In the first quarter of 2015, Greece had the highest debt-to-GDP ratio of any European Union (EU) member: 168% compared to an average of 92.9% in the Eurozone overall (Eurostat 2015). As a result, EU leaders decided to craft a bailout plan, imposing strict conditions for Greece's continued membership in the EU and the Eurozone.

The person responsible for negotiating on behalf of Greece was Alexis Tsipras, the prime minister and leader of the Syriza party, which somewhat surprisingly gained control of the Greek government in the January 2015 national elections (Witte 2015). Tsipras spent months negotiating a bailout deal with Greece's creditors before ending negotiations on June 26, 2015, and announcing that he would let the Greek people decide by holding a national referendum (How Greece's referendum works 2015).

The referendum was held on July 5, 2015. Greeks turned out to cast either a "yes" or "no" vote on the question of whether Greece should accept the bailout package offered by the country's creditors. Because the bailout agreement already had expired by the time the referendum was held, and because the way in which the question posed was unclear to many Greek voters, numerous observers claim that the referendum actually was a symbolic vote on whether Greece should remain in the Eurozone, the EU, or both. Voters essentially were asked to express their opinions for or against a "Grexit" from continued European integration ("How Greece's referendum works" 2015).

The actual bailout agreement being voted on was viewed by many Greeks as overly harsh. The terms of the agreement included restructuring the national sales tax with the goal of increasing revenue, an end to tax exemptions for Greek islands, disincentivizing early retirement, and phasing out a grant that provides additional income to pensioners (Peter 2015; European Commission 2015).

In the run-up to the referendum. Prime Minister Tsipras and his Syriza party urged Greek voters to vote against the terms of the bailout, arguing that a "no" vote would give him leverage to negotiate a more favorable deal with Greece's creditors ("So, we meet again" 2015). Greece's more conservative opposition party, New Democracy, encouraged voters to accept the bailout, arguing that Greece needed a "yes" vote to remain in the good graces of European creditors and to receive the financial assistance it so desperately needed.

When the referendum results finally were tallied, a majority of Greek voters sided with Tsipras and the Syriza party, with 61.3% voting against austerity nationwide. This paper specifies and estimates empirical models of the vote. We test for evidence of both "instrumental" and "expressive" voting motives and ask whether and to what extent political parties and the cues party labels and platforms provided influenced how Greeks voted on austerity.

Literature Review and Theory

Citizens, as in the "Grexit" case, occasionally are asked to make specific policy decisions that elected officials are either unable or unwilling to make themselves. Many scholars argue, however, that ordinary people are incapable of choosing rationally when faced with simple survey questions, let alone more complex public policy questions (Campbell et al. 1960) like those posed to Greek voters in July 2015. Despite this lack of rationality and the information problems associated with voting, individuals still turn out in relatively large numbers to cast their votes in elections across the world, and elected officials still view direct democracy as an important legitimizing tool when particularly controversial situations like the austerity requirements pushed for by the EU are on the ballot. As such, it is important to understand the average voter's decisionmaking process when asked to make a decision about a specific policy issue. …

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