IMPACT OF MACROECONOMIC CONDITIONS ON GOVERNMENT POPULARITY: AN ECOWAS INVESTIGATION

A main focus of this paper is our analysis of the vote function using the vote share of government parties as the proxy variable for government popularity. Utilising Pedroni's (1999) panel cointegrated test and the fully modified OLS (FMOLS) technique, we empirically examine the long‐run co‐mov...

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Bibliographic Details
Published in:The South African Journal of economics 2009-03, Vol.77 (1), p.28-44
Main Authors: Chang, Chun-ping, Ying, Yung-hsiang, Hsieh, Meng-chi
Format: Article
Language:English
Subjects:
Cointegration analysis
Economic conditions
Economic models
ECOWAS
Government policy
H11
Impact analysis
Macroeconomics
O57
Panel data
panel data approach
performance of government
Political economy
Popularity
Popularity of government
Public opinion
Studies
West Africa
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Summary:A main focus of this paper is our analysis of the vote function using the vote share of government parties as the proxy variable for government popularity. Utilising Pedroni's (1999) panel cointegrated test and the fully modified OLS (FMOLS) technique, we empirically examine the long‐run co‐movement relationship in a bivariate model between government popularity and macroeconomic outcomes as well as a lag term in accordance with updated data for 11 countries of the Economic Community of West African States (ECOWAS) during the 1975‐2005 period. The results indicate the existence of panel cointegration relationships in our empirical model. The panel FMOLS shows that several macroeconomic shocks are responsible for positive contributions to government popularity, especially in regard to economic growth and government expenditures. By contrast, currency depreciation, higher interest payments, and a greater taxation burden on households all contribute to lower government support in our sample countries. Based on such evidence, important policy implications emerge for ECOWAS.
ISSN:0038-2280
1813-6982
DOI:10.1111/j.1813-6982.2009.01207.x