سیاست اقتصادی و نتایج انتخابات

This paper studies the connection between economic policy and electoral outcomes. In particular, it analyzes the impact of the conflict between the agro-manufacturing sector and the national government on the congressional elections for national deputies in the 134 municipalities of the province of Buenos Aires – a conflict which stemmed from the increase in taxation and the imposition of quantitative restrictions on the sector's production and exports. The municipalities differ greatly in their productive structures; therefore, a policy that is detrimental (beneficial) to a certain sector of activity may be expected to have a greater negative (positive) impact on the election results for the governing party in those municipalities where that sector is quantitatively important. The estimations show that the relative importance of the agro-manufacturing sector, controlling for economic, social and political variables, had a positive impact on the party in office in 2007 and a negative one in 2009.

Fiscal theory evolved from the vision of a benevolent government which took decisions (e.g., on tax rates) with passive adaptation on the part of producers and consumers, towards models that incorporated the economic reaction from thoseagents by modifying their tax behavior as a response to the variables set by the government (changes in the taxable base according to the elasticities of supply and demand, tax avoidance through loopholes, and evasion). At a further stage, politicians and bureaucrats came on scene with their own interests, as well as consumers and producers reacting economically (modifying their tax base) and politically (voting).1 This study focuses on this last group, observing how economic policy decisions may influence electoral results and how the government may appeal to fiscal instruments to compensate for presumably negative reactions on the part of voters. The case under study is the connection between election results and fiscal policies in the 134 municipalities of the province of Buenos Aires. The results of the 2007 congressional elections for the partial renewal of deputies at the National House of Representatives were compared to those of the 2009 elections. The municipalities differ greatly in their productive structures, so that a policy that is detrimental (beneficial) to a certain sector of activity may be expected to have a greater negative (positive) impact on the election results for the governing party in those municipalities where that sector is quantitatively important. The policy under consideration in this study is the one related to the agri-food chain (AFC), which has been affected by high and increasing tax rates over exports and by quantitative restrictions which deteriorated the prices paid to the producers (selling quotas, prohibitions on exporting, etc).2 The results suggest that voters take into consideration the effects of public policies at the time of voting and that they change according to whether the policies are for or against their interests. The relative importance of the AFC had a positive impact on the party in power in 2007 and a negative one in 2009. The government, foreseeing a negative reaction on the part of voters, appealed to increases in the conditioned transfers to the municipalities, which had a positive impact on the votes for the ruling party, but could not compensate for the negative impact of the policy on the AFC.The study is organized as follows. In section II a simple model of the connection between election results and economic and fiscal variables is developed. Section III presents the context of the conflict between the agro-manufacturing sector and the national government prior to the 2009 elections. In section IV the productive structure of the municipalities of the province of Buenos Aires is described and an index is constructed to measure the importance of the sector for the empirical analysis. In section V econometric results are presented and in section VI a conclusion is arrived at. An online appendix details methodological aspects in the calculation of the gross geographic product generated in the AFC (online appendix A), and the data on the 2007 and 2009 election results and the significance of the AFC in each municipality (online appendix B).

This study belongs in the literature which analyses the effects of economic conditions on electoral outcomes. The results of the 2007 and 2009 elections for the partial renewal of deputies of the province of Buenos Aires at the National House of Representatives in the 134 municipalities, and their relationship with their productive characteristics, are studied. The context of the 2009 elections was the conflict which arose in 2008 between the agro-manufacturing sector and the national government –supported by the provincial government– due to the rise in taxes on exports (fundamentally grains and oleaginous products) and to market interventions through quantitative restrictions. Municipalities differ greatly in their productive structures: at one extreme there exist municipalities in which the contribution of the agro-manufacturing chain is over 70% of the total gross product, while at the other extreme it is about 5% or less. One can assume that a policy which is detrimental (beneficial) to a certain sector will have a greater negative (positive) impact on the election results, in those municipalities where the sector is quantitatively important. Separate estimations for the 2007 and 2009 elections are presented. Results suggest that voters take into account the effect of public policies at the time of voting and that they change according to whether they benefit or are damaged. The relative importance of the AFC had a positive impact on the votes obtained by the political party in power in 2007 and a negative one in 2009. The 2007 social coalition (positive votes from the AFC and the population having unsatisfied basic needs) broke down in 2009. In the same way there was a break in the political alliance with the Radical mayors which supported the national and provincial governments. The change in votes from the cadagro between 2007 and 2009 is intriguing and brings up the questions of whether voters are well-informed or not, and whether they are short-sighted and only take into account recent policies. The votes from cadagro supported the party in power in 2007, when taxes and quantitative restrictions on the sector’s production already existed. One hypothesis is that the combination of high and increasing international prices, high exchange rate and high yields, may have moved them to accept those policies – or else to believe in their temporal character. cadagro voters do not seem to have recalled the history of biases against the sector on the part of the party in power in other periods further away in time. The reversion of the favorable environment in 2007, combined withthe rise in taxes and quantitative restrictions, may explain the change in 2009. In this change, the activity of the sector’s entrepreneur unions must have played an important part, carrying out an active plan of action, spreading information and putting the problem in the media. These actions worked to face the “rational ignorance” problem in the political market assuming that the absence of voluntary cooperation is lower in the context of repeated games (Axelrod 1981). The high costs — in terms of lost earnings — of the measures against the sector encouraged voters to have a rational behavior by assuming the cost of the plans of action and of obtaining information. The “normal” percentage of votes for the ruling party — captured by the constant in the regressions — dropped between 2007 and 2009, reflecting an effect in common among all the municipalities. Partly it was associated with the “economic vote” due to the change in the economic situation, from positive to negative, between those years – lower growth and re-emergence of inflation. Political factors, such as the discretionary behavior and authoritarianism perceived by the population, also played a part. But there were remarkable differences between the municipalities according to the relative importance of the AFC. In the period under study the national government (by way of compensation and seeking to obtain votes) transferred funds directly to the municipalities in order to finance capital expenditure, fundamentally housing. The rise in capital expenditures was particularly important in the year prior to the 2009 elections and had a positive impact on the percentage of votes for the ruling party — contrary to the 2007 elections where the variations in capital expenditures did not turn out to be significant. It is difficult to ascertain to which level of government the responsibility for such expenditure was attributed, since the executant was the municipal level and the financer was the national one. In the important official campaign responsibility was shared but, probably, closeness with voters favored the municipal government. The differences between votes for national deputies and municipal councilors points in that direction. Although information is not available for all of the municipalities, in the 43 in which the lists of municipal councilors and national deputies identified themselves with the party in power (FPV), the councilors obtained a total of 25% more votes than the deputies, and in only one of them did the list of deputies exceed the list of councilorsThe robustness of the results was checked with additional estimates: difference of votes and control and treatment variables. The main findings of the separate estimations were confirmed.