Rabah Arezki, Simeon Djankov, Ha Nguyen, Ivan Yotzov, 30 October 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.

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