Responding to Voters or Responding to Markets? Political Parties and Public Opinion in an Era of Globalization

Representative democracy means that voters choose leaders to represent them in substantive terms (Pitkin 1967). In recent years, several studies have put this evaluative standard to the test. Many examine the extent to which political parties respond to public preferences. On this point, the weight of the evidence finds that parties in industrialized democracies are responsive to the public's preferences (Stimson, MacKuen, and Erikson 1995; Powell 2000; McDonald and Budge 2005; Soroka and Wlezien 2010), even in light of the multitude of factors pulling political actors in different directions (Tavits 2007; Meguid 2008; Adams and Somer-Topcu 2009). And while the penchant of representatives to respond to public demands may be shaped in part by electoral rules, party system polarization, party type, and the like, most studies conclude that, ultimately, democracy works.

Though edifying, this conclusion may ring hollow for citizens in many advanced capitalist democracies today. As then-Shadow Chancellor Harold Wilson's disparaging reference to financiers as “gnomes of Zurich” implies, politicians in Western democracies both in and (as in Wilson's case) out of government have long struggled with how to balance public demands with the pressures of the market. In the 1970s, for instance, financial markets were hedging against Sterling as the British economy fell into recession. Pressed between fulfilling campaign promises to increase spending and requirements for receiving loans from the International Monetary Fund, the Government chose the latter. In France, the Socialist Party was swept to power in the 1980s with a mandate for nationalization and redistribution. Yet less than two years later President Mitterrand backtracked on the policies preferred by the public and embarked on a policy regime of rigueur to bring the economy in line with global capitalism. Since the 1970s and 1980s, market dependencies have multiplied and deepened. In Greece, a Socialist-led government in 2009 began a process of rolling back the generous welfare state protections and entitlements popular with most of the electorate. In Ireland, the implosion of an asset bubble has required politicians to become attentive to bond ratings—and arguably so against the wishes of the median voter. And in Italy, attempts to dismiss the government were initially stymied. At the time, observers credited Prime Minister Berlusconi's temporary survival not to the popularity of his policies with Italian voters, but to fears of speculation by globally minded financial market actors. These examples and many others highlight instances where politicians face a choice between responding to voters and “responding” to markets. ...

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