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Political Parties, Social Class, and Economic Policy Preferences*

  • Edward R. Tufte

ALTHOUGH THE SYNCHRONIZATION OF ECONOMIC FLUCTUations with the electoral cycle often preoccupies political leaders, the real force of political influence on macroeconomic performance comes in the determination of economic priorities. Here the ideology and platform of the political party in power dominate. Just as the electoral calendar helps set the timing of policy, so the ideology of political leaders shapes the substance of economic policy.

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1 Alford, Robert R., Party and Society, Chicago, Rand McNally, 1963 , and Rose, Richard (ed.), Electoral Behavior: A Comparative Handbook, New York, The Free Press, 1974 , provide cross‐national comparisons of class polarization. See also David Cameron, R., ‘Consociation, Cleavage, and Realignment: Postindustrialization and Partisan Change in Eight European Nations’, paper delivered at the annual meeting of the American Political Science Association, September 1974.

2 Carll Ladd, Everett Jr,., with Hadley, Charles D. Transformations of the American Party System, New York, W. W. Norton, 1975, pp. 7274 Hamilton, Richard F., Class and Politics in the United States, New York, Wiley, 1972 and Knoke, David, Change and Continuity in American Politics: The Social Bases of Political Parties, Baltimore, The Johns Hopkins University Press, 1976.

3 Hibbs, ‘Economic Interest’, and Mueller, Eva, ‘Public Attitudes Toward Fiscal Programs’, Quarterly Journal of Economics, 77, 05 1963, pp. 210–35.

4 Similar evidence, sometimes linking policy images of the parties to votes, is reported for 10 elections in Morris Fiorina, P., ‘Economic Conditions and National Elections: A Micro‐Analysis’, manuscript, 1976. Key&s, V. O. findings in his The Responsible Electorate, Cambridge, Mass., Harvard University Press, 1966 , on issue voting are largely based on relationships between citizens’ views on economic issues and their vote. Disentangling the voters’ party affiliation, issue views, and perceptions (possibly quite selective and biased) of candidates’ stands on issues is impossible to do with any rigour. On this, see Richard Brody, A. and Page, Benjamin I., ‘Comment: The Assessment of Policy Voting’, American Political Science Review, 66, 06 1972, pp. 450458.

5 See Rose, Richard, ‘Comparability in Electoral Studies’, in Electoral Behavior, pp. 325 , for some quantitative assessments.

6 Downs, Anthony, An Economic Theory of Democracy, New York, Harper & Bros., 1957, pp. 115, 135, and 136. Cf. Wittman, Donald A., ‘Parties as Utility Maximizers’, American Political Science Review, 67, 06 1973, pp. 490498.

7 See Dahl, Robert A. and Lindblom, Charles E., Politics, Economics, and Welfare, New York, Harper & Row, 1953, pp. 300302 , for a discussion of party alternation and stable policies.

8 Heclo, Hugh, Modern Social Politics in Britain and Sweden, New Haven, Yale University Press, 1974, p. 294, n. 6.

9 Downs, An Economic Theory of Democracy, p. 300.

10 Ibid., p. 113. Further developments are found in, among many others, Bernholz, Peter, ‘Economic Policies in a Democracy’, Kyklos, 19, 1966, pp. 4880 ; Barry, Brian M., Sociologists, Economists and Democracy, London, Collier‐Macmillan, 1970 , chapter 7; and Frey, Bruno S. and Schneider, Friedrich, ‘On the Modelling of Politico‐Economic Interdependence’, European Journal of Political Research, 3, 1975, pp. 339360.

11 Pomper, Elections in America, pp. 188–189; for modified views, see Ginsberg, Benjamin, ‘Elections and Public Policy’, American Political Science Review, 68, 03 1976, pp. 4149 , and Winters, Richard T., ‘Party Control and Policy Change’, American Journal of Political Science, 20, 11 1976, pp. 597636.

12 Heclo, Modern Social Politics, pp. 296–297. Heclo’s account also emphasizes impediments to effective party control of social policy; see pp. 293–97. Further, the major source of policy innovation was neither parties nor politicians; it was the bureaucracy. The diversity of political variables available to account for the diversity of policies (as well as ways to describe policies) poses severe problems for makinggeneralizations and developing cumulative understanding of political‐economic interactions. For example, often some characteristic of the party system (or the political system) can be found to account for some economic policy. ‘It is a principle that shines impartially on the just and on the unjust’, wrote Van Wyck Brooks, ‘that once you have a point of view all history will back you up’. The difficulties in developing generalizations are suggested by Hansen’s findings that the important factors shaping US tax policy appear to be unified party control of the presidency and Congress and the changes wrought by realigning elections. See Hansen, Susan B., ‘Partisan Realignment and Tax Policy, 1789–1970’, paper delivered at the annual meeting of the American Political Science Association, September 1977.

13 Hibbs, ‘Political Parties and Macroeconomic Policy’, p. 1482. The monetary policy of the Federal Reserve Board (measured by fluctuations in the discount rate) does not appear to be responsive to the priorities of the party controlling the White House. This single result does not mean that left‐right differences are generally unimportant, as Cowart and Blum seem to conclude. See Cowart, Andrew T. and Blum, Anthony G., ‘Monetary Policy in America: Findings and Some Comparisons with the European Experience’, paper presented at the annual meeting of the American Political Science Association, September 1977.

14 As is evident in the scatterplots, these finds depend mainly on the substantial political and economic differences between the Scandinavian countries (with left‐wing governments and greater sensitivity to unemployment and distribution issues) and the United States and Canada (with more centrist governments more preoccupied with inflation). The comparison between the US and Sweden is investigated in the valuable study of Andrew Martin, The Politics of Economic Policy in the United States: A Tentative View from a Comparative Perspective, Beverly Hills, Calif., Sage Publishing, 1973. Within countries, the differences in macro‐economic performance due to party politics are more difficult to assess, in part because of time series problems and the long‐run dominance of the Left or the Right in the country. Hibbs did find, however, that (1) in the UK, Labour (when governing) did better than the Conservatives by 0.6 per cent in the unemployment rate and (2) the Democrats did better than the Republicans by 2.4 per cent. Finally, as Assar Lindbeck has pointed out to me, it is important to take into account the initial conditions faced by each party when it takes office. The Right may appear always to be battling inflation because it inherits a high inflation‐low unemployment economy from a defeated government of the Left. Similarly, the Left may inherit high unemployment and low inflation. Some good examples, as well as some good counter‐examples, are apparent in postwar economic history.

15 Kirschen et al., Economic Policy in Our Time, 1: p. 227.

16 Sawyer, Malcolm, ‘Income Distribution in OECD Countries’, OECD Economic Outlook: Occasional Studies, 07 1976, pp. 336.

17 These conclusions agree with those in Cameron’s much more elaborate study of various explanations of cross‐national differences in economic inequality. Cameron, David R., ‘Politics, Public Policy, and Economic Inequality: A Comparative Analysis’, paper delivered at the annual meeting of the American Political Science Association, September 1976.

18 Data on government receipts are from The OECD Observer, February 1974.

19 Cameron, David R., ‘Open Economies, Electoral Politics, and the Expansion of the Public Economy: A comparative Analysis’, manuscript, 1977. Other recent and helpful reports on the politics of economic management include Klein, Rudolf, ‘The Politics of Public Expenditure: American Theory and British Practice’, British Journal of Political Science, 6, 1976, pp. 401–43; and the important work of Cowart, Andrew T., ‘The Economic Policies of European Governments: Part 1, Monetary Policy’, paper delivered at the annual meeting of the American Political Science Association, September 1976. Cowart concludes (p. 41) ‘Governments of the Left appear to have taken more dramatic action in responding to domestic economic change‐whether for the purposes of maximizing the goal of full employment or minimizing price instability. They typically respond in significant ways to unemployment; their response to price instability is non‐trivial; and they do not appear hesitant to change monetary policy instruments.… The response of governments of the Right in the systems is simply more muted in most cases.’

20 The pattern described here (and in Figure 4) is special to the pre‐election period.

21 The only work on this issue is Lindbeck, Assar, ‘Business Cycles, Polities and International Economic Dependence’, Skandinaviska Enskilda Banken Quarterly Review, 2, 1975, pp. 5368.

* Excepts from Chapter 4 in Political Control of the Economy, by Edward R. Tufte. Copyright (c) by Princeton University Press. Reprinted by permission of Princeton University Press.

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Government and Opposition
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