Political Accountability and the Room to Maneuver

Abstract

Many studies of the room to maneuver make no provision for popular evaluation of policy. They assert rather than demonstrate popular satisfaction with policy choices and macroeconomic outcomes. The authors present a framework that explicitly models channels for popular preferences to influence policies and outcomes. Results for economic policy making in Britain do not support the room to maneuver thesis. In the authors' sample (1981 to 1997), the British government was responsive to changes in political evaluations, and its policy choices effectively fed back into popular evaluations of government policy. However, this accountability mechanism worked outside the real economy. Shifts in popular evaluations induced changes in policy but had no impact on inflation and economic growth. Government capacity to shape macroeconomic outcomes was limited, and popular influence over economic policy was ineffectual. This form of accountability probably existed because British citizens had difficulty gauging the real impacts of their government's policies.

Erratum

“…Responses include 68% eigendecomposition error bands to assess uncertainty because it means that during 12 months, there is a several point change in prime ministerial approval and vote intentions. These conclusions are consistent with the results in Sattler, Freeman and Brandt (2008). In our earlier analysis, the crucial links in the economic-politics causal chain in the Room to Maneuver debate are the impact of policy on the real economy and of the real economy on the political variables.…”

“…Details of the models and data can be found in Sattler, Freeman and Brandt (2008).In the earlier piece, the log marginal data densities (log MDDs) were reported incorrectly. The log MDDs are used to assess the posterior model fit of the three models.…”

Globalization and Public Attitudes towards the State in the Asia-Pacific Region

“…personal financial and sociotropic economic expectations and retrospections) become more favourable and then are translated into political satisfaction and support (Duckett and Miller, 2006: 174-179;Sattler et al, 2008Sattler et al, : 1214. When objective indicators (e.g.…”

Democratic Accountability in Open Economies

“…6 British governments therefore should be able to use fiscal policy to respond quickly to political evaluations and then effectively stimulate the economy. The role of fiscal policy becomes even more central when we take into account that monetary policy in liberal market economies, like Britain, may not be fully effective (Iversen, 1998a,b), an aspect that previous research has neglected (Sattler, Freeman and Brandt, 2008).…”

“…Specifically, we set the hyperparameter values at λ 0 = 0.6, λ 1 = 0.1, λ 3 = 1, λ 4 = 0.1, λ 5 = 0.05, µ 5 = µ 6 = 5. These (and similar) values have been widely used in the macroeconomics and political economy literature (e.g., Sattler, Freeman and Brandt, 2008;Sims and Zha, 1998;Cushman and Zha, 1997). The resulting posterior inferences are robust to alternative values.…”