There is a wide consensus concerning the view that politics is largely affected by the economy. One does not need to be a Marxist or a political consultant to accept the accuracy of this idea which seems to be rather trivial. However, empirical research in this field has brought about some few complications. Inflation, unemployment and economic growth impact on the behavior of voters especially the decision to vote for a particular party. However, corroboration of facts is mainly based on aggregate data and macro-level studies (Dorussen & Taylor).
Direct link between economic conditions and voters actual political decisions cannot be provided by relying on data mainly from individual voters. Voters consider the economic situation and they also hold politicians responsible for the success or failure of the economy. However, as noted by Dorussen and Taylor, reviewing the available empirical evidence only bring much uncertainty and ambiguity on the subject. Regardless of the impressive amount of literature on the economic voting in the previous years, there are still many questions that need to be addressed.
Most of these assessments and analysis focus on the relationship between voting decisions and subjective interpretations. They also focus on objective economic indicators and economic interpretations. The specific political aspects of elections are often ignored when attempts are being made to put into use the general theories concerning the calculus that drive economic voting. There is a wide agreement that the cognitive processes of economic voting changes with the political context.
Evidence also indicates that the popularity of a government is strongly linked with the condition of the economy (Sanders et al, 1987: 281-312). The foundations of economic voting are to be found in deep rooted social and psychological factors. Economic voting in itself is a theory about applied rational behavior and the application of such a model needs a comprehension of the real psychological environment about which the thoughts on the economy and applying these thoughts to make decisions about voting takes place. There are three set of variables that stand out to be of special interest.
Previous research indicates that human beings are generally averse to risk (Erikson et al, 2002: 787). Modest expectations and realistic analysis of the degree of voter sophistication has been called for by investigation of socio-psychological factors. Emotional factors may also matter. It may not be necessary that the influence of these factors become constant across political institutions. With respect to this, a better comprehension of voter diversity expands the conception of the differences between groups in the practical reasoning that underlies economic voter behavior.
These contextual effects must be accounted for by empirical evaluations and theoretical developments of the economic voting paradigm. Individual choice behavior of consumers is often treated by economists as a means to the more vital task of deriving propositions about the functioning of the economy and its results (Downs, 1957:76). This is despite the economists’ commitment to methodological individualism. It is however difficult to postulate the relative indifference of economists towards individual behavior even though some appeal to the law of large numbers and trust in smoothing out individual perversities.