Thursday, January 25, 2018

Parsing the Poland Problem Paradox: Local Versus National Outcomes

As argued in numerous posts here, we have seen an apparently emerging disconnect between economic conditions and political outcomes in a variety of nations, with anti-immigrant or more generally nationalist or populist parties with authoritarian tendencies gaining strength in many nations despite apparently improving or even largely pretty good economic conditions.  A list of those showing this includes Poland, the US, Germany, UK with the Brexit vote, Austria, Sweden, the Netherlands, and some others (I had Iran on the list, but it seems to a more complicated case).  I labeled this phenomenon to be the "Poland problem," with the Law and Justice Party coming to power in 2015, despite Poland having been probably the best economically performing of all the European transition economies, as well as being the only European nation not to having gone into recession in 2009.

Now a study by Yann Algan, Sergei Guriev, Elias Papaionnou, and Eugenia Passari at Pro Market (and linked to today by Mark Thoma at Economistsview) finds that if one looks closely at local economic conditions in parts of European nations over recent years, specifically changes in unemployment rates, one finds that there seems to be a relationship between such increases and increased support for "populist" parties, a "specter hanging over Europe."  I find the study reasonably persuasive.  So this would mean that a possible explanation for the Poland problem is that unhappiness in suffering and poorer regions overwhelms broader good economic performance in nations, leading in some cases to actual takeovers by these parties.

I note that for at least some nations where I know the geographic details better, this fits with the odd situation where those regions voting most vigorously for strongly anti-immigrant parties are also th regions with fewest immigrants.  This reminds me of the old wisecrack about Poland from 1968 when there was a major outbreak of anti-Semitism that Poland was showing how to have anti-Semitism while having few Jews.

We should note that while this local outcome finding reasserts the standard link between economic conditions and political outcomes, the Poland problem does not completely go away.  The hard fact is that while indeed we see worsened economic conditions leading to voting for political change, we see these cases where in fact conditions in the nations as a whole are/were pretty good.  But those good conditions in other parts of these nations fail to deliver satisfaction sufficient to save the incumbent parties.  We have seen such local behavior previously without this sort of outcome happening at the national level.

I shall add two further notes on the case of the US, some of which I already made in my earlier post on the US having a Poland problem.  One is that in fact looking at the popular vote, the better national conditions did offset the locally bad ones in the Rust Belt in that in fact Clinton won the popular vote fairly solidly over Trump.  But the shifts in those Rust Belt states crucially shifted electoral votes so that Trump won the electoral vote and became president.

There is also a more complicating aspect to this.  Without doubt parts of the states that shifted between 2012 and 2016 in the Rust Belt, IA, WI, MI, OH, and PA, fit the ProMarket story. : especially in PA and OH.  We see locations such as Scranton-Wilkes Barre and Erie in PA having bad economic conditions and switching sharply from Dem to GOP between 2012 and 2016.  In OH Youngstown also fits this as well as some manufacturing urban areas in MI.  But important lrgions in these states did not fit the story.  In particular reasonably well-off rural areas in parts of OH, MI, WI, and IA, with these areas the key for the switch in state outcomes in the latter two, especially southwestern Wisconsin and southern Iowa, the state with the largest percentage change in vote.  These changes were not driven by bad economic conditions.  Some of these, especially in SW WI, switched just prior to the election, with the infamous Comey email story likely playing a major role.

Of course today we have Trump facing a Poland problem: US economy clearly growing solidly, with well over 50% of voters saying so.  But Trump's support is a good 20% lower.  I have read that Trump and some of his associates quoting James Carville on "It's the economy, stupid," hoping that a big advertising campaign pushing the supposedly stimulative effect of the GOP tax cut.  It may well be that they are not going to succeed, and Trump and GOP will fall victim to the US version of the Poland program as the GOP takes a large hit this fall in a Dem wave, despite the economy doing well.

Barkley Rosser



AXEC / E.K-H said...

Cryptoeconomics ― the best of Mark Thoma’s spam folder
NOTE on Barkley Rosser’s ‘Parsing the Poland Problem Paradox: Local Versus National Outcomes’ and sequel to ‘Cryptoeconomics ― the best of Nick Rowe’s spam folder’

Economics claims to be a science but is not. There is political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

Theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years.

Accordingly, in their research and communication, economists are not guided by the principles of Science but by the principles of Circus Maximus. As a consequence, in the econoblogosphere, the best stuff is in the spam folders, and what is tirelessly recycled is soft soap, blather, gossip, propaganda, disinformation, and proto-scientific crap.

It is at anybody’s guess to which extent the econoblogosphere is corrupted. The problem, of course, is that spam folders are invisible to the general public. Private censorship is built into the blogging software and works without any traces.

Occasionally, there are exceptions. For those who appreciate the privilege of casting a glance into Mark Thoma’s spam folder, here is a sample of comments he suppressed over the last half year.

See part 2

AXEC / E.K-H said...

Somehow Part 2 got lost. For the full text see said...

Western civilization as we know it will collapse as a result, Egmont.

AXEC / E.K-H said...

Barkley Rosser

Western civilization originated in ancient Greece 2000+ years ago with the distinction between episteme = knowledge and doxa = opinion. Apparently, it has not yet arrived at the place where you dwell.

Egmont Kakarot-Handtke said...

As already noted, Egmont, you are clearly the most knowledgeable and important defender of western civilization as we know it, so indeed the failure of your message to get posted is a harbinger of its impending collapse, if not the outright trigger of that collapse, you are that important. Clearly.