Abstract
A large literature has studied the trend of greaterpolarization between Democrats and Republicans in Congress.This paper empirically examines the extent to which inflationand unemployment explain cyclical movements ofpolarization over time. An informal application of thestandard Downsian spatial competition model of partiesgenerates the following relationships, ceteris paribus: (1)inflation should be associated with policy convergence, (2)unemployment should be associated with polarization, (3) theeffect of unemployment on polarization should be larger inmagnitude than the effect of inflation on convergence, and (4)the effect of unemployment on polarization should be strongerin the House than in the Senate. We estimate the relationshipbetween vote records and business cycle conditions over the1947–1999 period using a GLS model with varying lags. Ourresults are broadly consistent with these business cyclehypotheses of polarization, though greater support is found inHouse data than in Senate data.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Alesina, A. and Rosenthal, H. (1995). Partisan politics, divided government, and the economy. New York and Cambridge: Cambridge University Press.
Alesina, A. and Sachs, J. (1988). Political parties and the business cycle in the United States, 1948–1984. Journal of Money Credit and Banking 20: 63–82.
Becker, G. (1983). Competition among pressure groups for political influence. Quarterly Journal of Economics 98: 371–400.
Caner, M. and Hansen, B.E. (2001). Threshold autoregression with a unit root. Econometrica 69: 1555–1596.
Clarke, H.D. and Dutt, N. (1991). Measuring value change in western industrialized societies: The impact of unemployment. American Political Science Review 85: 905–920.
Calomiris, C.W. and White, E.N. (1992). The origins of federal deposit insurance. In Claudia C. Goldin and G.D. Libecap (Eds.) The regulated economy. Chicago, IL: University of Chicago Press.
Cox, G. (2001). Introduction to the special issue. Political analysis. Special issue on ideal point estimation 9: 189–191.
Culver, S.E. and Pappell, D.H. (1997). Is there a unit root in the inflation fate? Evidence from sequential break and panel data models. Journal of Applied Econometrics 12: 435–444.
Denzau, A.T. and Munger, M.C. (1986). Legislators and interest groups: How unorganized interests get represented. American Political Science Review 80: 89–106.
DiTella, R., MacCulloch, R. and Oswald, A.J. (2001). Preferences over inflation and unemployment: Evidence from surveys of happiness. American Economic Review 91: 158–170.
Downs, A. (1957). An economic theory of democracy. New York: Harper Collins.
Durr, R.H. (1993). What moves policy sentiment? American Political Science Review 87: 158–170.
Enders, W. (1995). Applied econometric time series. New York, NY: John Wiley & Sons, Inc.
Evans, G.W. (1989). Output and unemployment dynamics in the United States: 1950–1985. Journal of Applied Econometrics 4: 213–237.
Grier, K. and McGarrity, J.P. (2002). Presidential party, incumbency, and the effects of economic fluctuations on House elections, 1916–1996. Public Choice 110: 143–162.
Grier, K.B. and McGarrity, J.P. (1998). The effect of macroeconomic fluctuations on the electoral fortunes of House incumbent. Journal of Law and Economics 41: 143–161.
Groseclose, T., Levitt, S.D. and Snyder, J.M., Jr. (1999). Comparing interest group scores across time and chambers: Adjusted ADA scores for the U.S. Congress. American Political Science Review 93: 33–50.
Hibbs, D.A. (1977). Political parties and macroeconomic policy. American Political Science Review 71: 1467–1487.
Heckman, J. and Snyder, J. (1997). Linear probability models of the demand for attributes with an empirical application to estimating the preferences of legislators. Rand Journal of Economics 28: 142–189.
Judge, G.G., Griffiths, W.E., Hill, R.C., Lütkepohl, H. and Lee, T.C. (1985). The theory and practice of econometrics. New York, NY: John Wiley and Sons.
Kramer, G.H. (1971). Short term fluctuations in U.S. voting behavior. American Political Science Review 65: 131–143.
Layman, G.C. (1999). Culture wars in the American Party System: Religious and cultural change among partisan activists since 1972. American Politics Research 27: 89–121.
Lee, H.-Y. and Wu, J.-L. (2001). Mean reversion of inflation rates: Evidence from 13 OECD countries. Journal of Macroeconomics 23: 477–487.
Maddala, G.S. and Kim, I.-M. (1998). Unit roots, cointegration, and structural change. Cambridge and New York: Cambridge University Press.
McCarty, N.M., Poole, K.T. and Rosenthal, H. (2001). The hunt for party discipline in Congress. American Political Science Review 95: 673–687.
McCarty, N.M., Poole, K.T. and Rosenthal, H. (1997). Income redistribution and the realignment of American politics. Washington, DC: American Enterprise Institute Press.
Poole, K.T. (2000). A non-parametric unfolding of binary choice data. Political Analysis 8: 211–237.
Poole, K.T. and Rosenthal, H. (2001). D-NOMINATE after 10 years: A comparative update to Congress: A political-economic history of roll-call voting. Legislative Studies Quarterly 56: 5–29.
Poole, K.T. and Rosenthal, H. (1997). Congress: A political-economic history of roll call voting. New York, NY: Oxford University Press.
Poole, K.T. and Rosenthal, H. (1991). Patterns of congressional voting. American Journal of Political Science 35: 228–278.
Poole, K.T. and Rosenthal, H. (1984). The polarization of American politics. Journal of Politics 46: 1061–1079.
Romer, C.D. (1986). Is the stabilization of the postwar economy a figment of the data? American Economic Review 76: 314–334.
Romer, C.D. (1989). The prewar business cycle reconsidered: New estimates of gross national product, 1869–1908. Journal of Political Economy 97: 1–37.
Stigler, G. (1973). Micropolitics and macroeconomics. American Economic Review 67: 160–167.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
López, E.J., Ramírez, C.D. Party Polarization and the Business Cycle in the United States. Public Choice 121, 413–430 (2004). https://doi.org/10.1007/s11127-004-1687-x
Issue Date:
DOI: https://doi.org/10.1007/s11127-004-1687-x