Tor Midtbø

The impact of parties, economic growth, and public sector expansion: A comparison of long-term dynamics in the Scandinavian and Anglo-American democracies

This paper discusses (1) the extent to which the partisan composition of government affects economic policies and macroeconomic outcomes, and (2) the interrelationship between public spending, taxation and economic growth. These two issues are connected. Since target variables and instruments affect each other reciprocally, the specification of the partisan model should encompass both a reaction function and an outcome function. A pooled vector autoregressive model suggests that during the last century left-wing governments in the United States, Britain and Canada have reinforced the growth of both public spending and GNP. Only public sector expansion is affected by partisanship in Denmark, Norway and Sweden. In the Anglo-American countries changes in spending occur before changes in economic growth in terms of a lagged crowding out effect. Spending and revenues appear to affect each other reciprocally. By contrast, public sector expansion in Scandinavia stimulates growth, while taxation leads spending.

The Referendum-Election Nexus: an Aggregate Analysis of Norwegian Voting Behaviour

Abstract This article presents a straightforward, albeit rigorous, method to study the relationship between voting in elections and referendums. The dynamics between direct and indirect democracy is identified by means of a non-recursive, simultaneous equation model. We ask whether the process leading up to the Norwegian 1994 referendum influenced party support in the 1993 parliamentary election or, rather, if party support influenced the referendum outcome itself. As expected, the results show that the large pro-EU parties (the Labour Party and the Conservative Party) were punished in Euro-sceptical municipalities. The EU issue boosted the support for the party most fiercely opposed to EU membership (the Centre Party). However, the issue attenuated the support for another no-party (the Socialist Left Party). From the reverse perspective, Euro-enthusiasm is particularly discernible in the strongholds of the two right-wing parties (the Conservative Party and the Progress Party). Contrary to conventional wisdom, the results show that the strength of the governing Labour Party did not have any appreciable effect on the referendum outcome. The Labour Partys failure to mobilise hesitant voters may explain why Norway continues to stand outside the European Union.

The Open Politiconomy: A Dynamic Analysis of Social Democratic Popularity and Economic Policies in Scandinavia

The political economy literature has not considered in detail the dynamic interrelationship between one politico-economic system and another. To fill this lacuna, the author uses a VAR model to study the relationship between social democratic popularity and the economy not only within but also between the Scandinavian countries. In addition to the expected macroeconomic interdependence, there is empirical support for the traditional partisan theory. Economic voting is found only in Denmark. Social democratic popularity is not much affected by the economy, but it is found that the economy is influenced by social democratic popularity. An increase in the popularity of the social democrats eventually causes higher inflation. In particular, the popularity of the Swedish Social Democrats creates inflationary pressure in Sweden, and this pressure is exported to Denmark and Norway as well.

Democracy and the demand for government redistribution: A survey analysis: DEMOCRACY AND THE DEMAND FOR GOVERNMENT REDISTRIBUTION

This article uses survey data to study the impact of democracy on the demand by poor citizens for government redistribution. Taking the well‐known Meltzer‐Richard theory as the point of departure, three arguments are presented as to why such a demand should be stronger in democracies than in autocracies: in democracies low‐income groups are: (1) exposed to elections that can make a policy difference: (2) better informed about the income distribution; and (3) better equipped to process such information. The argument receives empirical support in a Bayesian multilevel analysis which combines 188 World Values Surveys with cross‐sectional and longitudinal macro data from 80 countries.