European Journal of Political Research 12 (1984) 381 -401 Elsevier Science Publishers B.V., Amsterdam - Printed in the Netherlands

The Effect of Aggregate Economic Conditions on the Political Preferences of

the Italian Electorate, 1953-1979*

PAOLO BELLUCCI

European University Institute, Florence, Italy

ABSTRACT

Studies on Italian electoral behaviour have relied mainly on ideological explanations of party support. Taking a rational choice approach, this paper assesses the relevance and the impact of aggregate economic conditions upon the political preferences of the Italian electorate in the period 195>1!79. Without neglecting the strength of ideological and cultural ties with parties, it is found that economic considerations do play an important role for Italian electors. Increasing inflation reduces the electoral strength of the Christian Democratic Party while it rewards the Communist opposition. Growing unem- ployment shows an opposite trend, thus pointing out the peculiarity of the economic relationship that links electors to parties in the Italian system, which can be accounted for within a rational framework.

Studies on Italian electoral behaviour have tended to concentrate on explanations based on the ideological attachment and identification of the elector with parties, as well as on basic party predispositions rooted in the political traditions of different social groups in the electorate. Scholars have in turn focused mainly on three sets of explanatory variables: social stratification and class structure; political culture and traditions; party organizational network and communication flows. On the other hand, little attention has been paid explicitly to the role that economicconsiderations play in the electoral choice. Moreover, those studies which focus on socio-economic variables (e.g. Galli, 1968; Bartolini, 1977; Barnini, 1977; Mannheimer, 1980) have limited themselves to individual elections, or to comparisons between two elections, thus exploring either cross-sectional variance or short-term shifts, making it difficult to account for any global trend.

Only very recently have attempts been made to assess the relevance of economic considerations in electoral choice (Lewis-Beck and Bellucci, 1982; Santagata, 1982). Even though these studies must be considered as preliminary, nevertheless they

* I would like to thank R. Wildenmann, I. Budge and J. Hanning for valuable comments and criticism on an earlier version of this paper.

387

0304-4130/84/$03.00 @ 1984 Elsevier Science Publishers B.V.

388 would seem important since they do represent the first efforts to analyse the electoral behaviour of the Italian electorate within a rational choice theoretical framework.

This contribution to the debate presents results from research on the impact of aggregate economic conditions upon the political preferences of the Italian electorate in the period from 1953 to 1979. The underlying assumption is that an economic explanation also represents a sound explanation of electoral behaviour for Italy. Moreover, for reasons to be stated later, we do not expect economic variables to account fully for the complex phenomenon of voting in a polity such as Italy, whose political system has been considered as either the ‘ideal type’ of polarized pluralism or as an imperfect form of bipartitism. At any rate, it is a system in which the relevance of ideology at the grass-root as well as at the Clite level has been considered sufficiently important so as to ovemde any other consideration, especially at the polls. On the contrary, it will be shown that economic considerations do play an important role for Italian electors, without, however, neglecting the strength of ideological and cultural ties with parties. Consequently, before pre- senting the findings for the Italian case, we shall briefly assess elements of the rational voter theory and examples from the relevant literature in order to demonstrate how a rational approach to electoral behaviour can be applied to the Italian system.

1. THE GENERAL FRAMEWORK: ECONOMICS VERSUS POLITICS

In spite of the close relationship between economics and politics, systematic empirical studies on their reciprocal interdependence do not have a long tradition. From the viewpoint of political science, the discipline had first to go through the behavioural revolution and critically review its historicist and institutional frame- work before pursuing more empirical research. But empirical research meant a shift from a mainly descriptive focus to hypothesis-testing and model-building which in turn promoted an intense interest in a more sophisticated methodology leading eventually, at least methodologically but also substantively, to closer contacts between economics and political science (see Whiteley, 1980,9).

Thus, due to this merging process in the early 197Os, the relationship between the economy and the polity began to be systematically studied. Most of the research on the effects of economic conditions upon parties’ electoral support has dealt with the United States (e.g., Kramer, 1971; Stigler, 1973; Arcelus and Meltzer, 1975; Goodman and Kramer, 1975; Bloom and Price, 1975; Tufte, 1975; Fiorina, 1978; 1981). Fewer studies have focused on European nations (Frey and Garbers, 1972; Rosa and Amson, 1976; Frey and Schneider, 1980; Whiteley, 1980; Madsen, 1980; Lewis-Beck and Bellucci, 1982; Santagata, 1982). The abundance of studies on the American political system, compared with the relative scarcity of similar research on Europe, is probably due to the different political settings in which the interaction between the polity and the economy is analysed, and to the theoretical framework employed to investigate it.

In fact the studies on voting (and popularity) functions, prompted by Kramer (1971), have led to empirical assessments of the well-known, but previously and still reasonably untested, theory that incumbent parties are hurt by a worsening economy, while the opposition is favoured by As Monroe (1979) has clearly pointed out for the American case, assessing the impact of economic conditions upon

389

political behaviour has represented a shift away from partisanship to the rational voter approach proposed earlier by Downs (1957). Accordingly, the basic deter- minant of voting behaviour is assumed to be the voter’s utility income derived from government activity; this provides the basis upon which the elector assesses the performance of the incumbent party(ies), and rationally decides to cast a vote.

Downs’ concept of utility income must, however, be correctly understood. We must in fact clearly distinguish between rational theory and the relevance of economic considerations within the theory. In Downs’ terminology utility income does not refer exclusively to economic income (e.g., monetary benefits), but encom- passes all benefits - though defined circularly as ‘streams of utility’ -enjoyed by the electorate (Downs, 1957, 36).3 Thus, focusing on the influence of economic con- ditions upon political behaviour does not mean limiting Downs’ concept simply to only the economic factors. On the contrary, using the rational voting framework means the acceptance of its logic as the pattern of electoral behaviour, while the selection of economic indicators as explanatory variables is due to, first, the sub- stantive importance of the economy for the electorate, and second, the great likelihood that with respect to economic considerations the electorate does behave rationally.

Naturally, difficulties still remain. First, not everything is explained by economic factors. In fact, the selection of economic variables as predictors of voting behaviour leaves out many important non-economic factors, namely political variables such as party identification, class solidarity issues, etc., which have been shown to be of great importance for the electorate. Paldam (1981,9), surveying 50 important studies on vote (and popularity) functions in several countries (but with the noteworthy absence of Italy), reports that on average only one-third of the variance in electoral fluctuations is accounted for by economic factors. This is to say that vote functions are likely to tap fluctuations due to swing-voters, supposedly the most informed and educated element of the electorate which pays great attention to governmental political and economic performance; little is known about the consequences of economic fluctuations for the less volatile core voters who possess strong party identification.

This issue leads to the crucial problem of assessing the relevance of vote functions in both two-party and multi-party systems, which actually remains the ‘hot’ issue. We have already noted the relative abundance of studies for countries such as the US and England (considered the best examples of two-party systems), while fewer studies have dealt with countries which exhibit different degrees of moderate or polarized pluralism. This is far from being a mere coincidence, since an economic explanation describes electoral behaviour better in a two-party system than in a multi-party system. In fact, at least three minimal conditions must be met in order for a deteriorating or improved economy to affect party support in the manner previously stated:

1. the electorate must be able to identify and hold the incumbent responsible for

2. the electorate must be able to cast a vote for an opposition which has a real

3. the ideological distance among the parties must be small enough to allow each

the performance of the economy;

chance to achieve power;

of them to be a credible governing alternative.

390 These conditions fit better a two-party system where alternation in power is

actually experienced, as between the Republican and Democratic parties in the US. The rational actor framework is likely to be grounded in such a system and, most important, can be empirically tested. If a worsening economy results in a decrease of the incumbent party’s electoral support, while economic upturns increase it, the rational model proves to be valid.

Generally, the findings of the American studies seem to show a significant effect of economic conditions on electoral outcomes, even though there is no substantive agreement among researchers on the relative importance of different economic variables nor on how they affect party support. Three economic variables have emerged as most important predictors: inflation, unemployment and income. It is important to note that inconsistency of results often stems from the very differences in defining and measuring them.4

To summarize, the rational voter framework seems to account fairly well for the American case, or at least the findings do not allow us to reject it fully. The question we must now ask ourselves is whether the same economic model is applicable to a European multi-party system where discontent for government policies does not automatically translate into a vote for a party of the opposition.

Two features of multi-party systems seem here to be relevant. First, the presence of coalitions of parties in office makes a straightforward extension of the model inappropriate, since the first of the minimal conditions stated previously (the responsibility condition) is not met. The reason for this is that the electorate might not be able to identify which of the coalition parties is to be held responsible. Furthermore, an electorate dissatisfied with a party’s policy can turn to a different party within the government coalition, without this translating into an ousting of the coalition itself, but only in a redistribution of the relative weight of the parties.

Second, the greater importance of ideological and partisan voting paired with a larger ideological distance among parties in Europe, especially if compared with the more pragmatic attitude of both the American electorate and parties, further restricts the applicability of the rational modeL5 A dissatisfied elector may indeed not want to vote for an opposition party, since that party’s ideology and programme could greatly contrast with his own. This might be the case in nations with strong Socialist and Communist parties - for example, Italy and France. As a consequence of this political polarization a rational evaluation of the incumbent’s past performance can, even if negative, still elicit a vote for the incumbent party. Thus the second and third conditions are not met either.

The preceding discussion leads to the conclusion that explanation through pure economic factors as suggested by Kramer and assumed in most of the studies in this area of research, while more appropriate to two-party systems, needs some revision if applied to polarized multi-party systems. In particular, its explanations and predictive power are reduced, in the sense that the effect of aggregate economic conditions on electoral outcomes can be assessed relative to individual parties (or homogeneous groups of parties), but little can be said with safety about electors shifting from incumbents to opposition parties. In other words, we can measure and assess the effect of inflation and unemployment on the level of (or change in) support of, for example, the Italian Communist Party, but we are unable to detect, at least at the actual level of sophistication and with only aggregate data available, whether rising inflation causes Socialist or Christian Democratic electors to abandon their

39 1 parties for the Communist one.

The French case illustrates this problem well. In the first study ever to appear on this issue in France, Rosa and Amson (1976), faced with the same problem of identifying a rigorous political dependent variable, recognized that the American model was not strictly applicable to the French case. As Rosa wrote in the English version of the article:

It would be difficult to infer that a citizen voting for a centrist party is satisfied or otherwise with the policies of the government. The labyrinth of partisan coalitions makes it very difficult for the voter to define himself clearly. (Rosa, 1980, 102.)

They overcame the impasse by using the percentage of votes for leftist parties as a measure of the voters’ discontent with the performance of the government. Of course their choice is not without problems for, as the authors themselves acknowledged, left voting does not necessarily coincide with protest voting. However, since most of the elections they examined took place with the left parties opposing government policies, their choice seems to be sufficiently grounded. A look at their findings is rewarding, for Communist and non-Communist left react differently to economic changes: rising inflation and unemployment damage the non-Communist left and favour the Communist party, while increase of real income is associated with decrease of Communist support and increase of the non- Communist left. However, the authors’ uncertainty in choosing a specification among the 92 equations they present, as well as serious measurement problems, prevents the acceptance of their findings as definitive. A more rigorous study is offered by Lewis-Beck and Bellucci (1982), where the influence of economic conditions on legislative elections is assessed in France and Italy. Although the time series is very short, i.e., only seven national elections are analysed in each country, the results display a consistent pattern. In France the vote for the Left, i.e. Socialist, Communist and small left parties, increases with rising unemployment and declining income, both basic indicators of a deteriorating economy. Moreover, the two economic variables alone explain 63% of the variance in the vote, well above the average one-third reported by Paldam (1981). For Italy the impact of economic conditions on the level of electoral support of the Communist Party, which has been the main opposition for most of the post-war period, is examined. It was found that increasing inflation increases its electoral support, while increased unemployment hurts it. This last finding, quite astonishing since growing unem- ployment was expected to be positively associated with the Communist vote as in the French case, is not a statistical artefact. On the contrary, it reflects both the uneven geographic strength of the Communist electorate, which is stronger in urban areas where unemployment is lower thus yielding a negative association, and the peculiar ties which bind electors to parties in the Italian system which will be discussed later.

In summary, the complex of the evidence confirms the hypothesis that economic conditions do affect political outcomes in France and Italy; moreover, these studies show that this relationship can be explained in terms of a modified economic framework in a multi-party system, and not simply in a two-party system. With more confidence, therefore, we can now turn to a deeper analysis of the relationship between the economy and the polity in Italy.

392

2. THE ITALIAN CASE

The present analysis focuses on the electoral support of the Christian Democratic Party (DC) and of the Communist Party (PCI), with the general hypothesis that the incumbent (the DC) is hurt by a worsening economy while the opposition (the PCI) is favoured by it. The period studied covers the seven national elections held between 1953 and 1979. This choice represents a departure from tradition since the 1946 elections for the Constituent Assembly and the first national political elections in 1948 are excluded from the analysis. Such exclusion is not arbitrary. On the contrary, the underlying rationale is stringent: studying the relationship between economic conditions and parties’ electoral support requires a political system and an economic system with a minimum degree of stability. This is not the case in the first Republican elections, when the new Italian political system was being formed and the country had just come out of the war facing exceptionally high inflation and unemployment. An example is enlightening: in 1947 the inflation rate was 62% while in the following year it dropped to 6%. It is clear that if we include the early years in the analysis, the estimates which result would be misleading.6 Following the tradition established by earlier studies, three variables are taken as indicators of the state of the economy: the inflation rate (I,) calculated from the yearly Consumer Price Index:

I, = (CPI, - CPI,-I)/CPI,-, x loo;

c, = CJCPI, x loo; the real per capita income (C,) expressed in 100,OOO lire:

and the unemployment rate (U,) as a percentage of the labour force.’ It has been noticed (Bloom and Price, 1975, 1243) that relating electoral outcomes for a given year to economic conditions for the same year might yield misleading results, for the real state of the economy in the election year is known only when the year has already elapsed. At the same time, it is unlikely that in casting a vote the elector considers only the current state of the economy, disregarding what happened before. There can be no safe agreement on how short the elector’s memory is; most authors, however, tend to set it at about twelve months.

The relevance of a lagged effect of economic fluctuations on voting is confirmed in the Italian case. Table I presents the correlation coefficients between DC and PCI vote and the economic indicators considered in the analysis. Correlating the vote to economic conditions of the year preceding the elections yields consistently larger coefficients than taking all variables for the electoral year. Then in this study the electoral outcomes of the year t are related to the economic situation at time t - 1.

TABLE 1. Correlation coefficients between DC and PCI vote and inflation, unemployment and income at time t and t - 1

Inflation, Inflation,- 1 Unemployment, Unemployment,- I Income, Income,-

DCvote -.68 - .70 .19 .44 -.61+ -.67+ PCI vote .86 .93 .05 - .29 .85+ .85+

= 10 (Regional elections are included). Not significant at .05 level while all other coefficients are so.

393

The preceding considerations suggest a preliminary model of electoral support:

Vt = bo+blII -I+bzUI-~+b3Ct-I+eI

where: V, is the party’s electoral support expressed as a percentage of the total vote; I , - l is the inflation rate; Vt-l is the unemployment rate; C,-I is the per capita income; e, is the error term; bo, bl , b2, b3 are the parameters to be estimated. The hypotheses for the PCI are: bl , b,>O, b,<O. For the DC they are: bl , b,<O, b3>0. Estimating with Ordinary Least Squares (OLS) yields the coefficients which appear in Table 11.

TABLE 11. Influence of economic variables on the DC and PCI vote, 195S79

Per capita DW K? Party Constant Inflation Unemployment income

DC 39.2 .03 .43 -.16 .I6 2.1

PCI 22.8 ,591 - .23 .I0 .96 2.3 (.16) (1.3) (- .w

(4.8) (-1.2) (.W

N = 7. The values in parentheses are t-ratios. § P < .05.

The impact of the aggregate economic variables on the vote for the DC is rather obscure, since none of the relevant regression coefficients is statistically significant. The model performs somewhat better with regard to the Communist Party: inflation shows a significant effect on the party’s level of support. In particular, a 1% increase in the inflation rate produces, on average, half a percentage point increase in the Communists’ share of the vote. The coefficient for unemployment, b,, supposes a negative impact of this variable, while b3, the income coefficient, suggests a positive association. However, the lack of statistical significance of both variables prevents us from making a definitive inference.

Even though the RZ values are fairly high, the model presents serious problems, as shown by the non-significance of most coefficients and by the presence of auto- correlation. Two factors seem to lie behind the poor performance of the model: the small sample size and multi-collinearity.

The time-series is very short, N = 7, and this of course makes it difficult to meet the normality assumption required for testing the significance of the econometric model. However, an inspection of the frequency distribution of the dependent variables, i.e., the votes for each party, reveals that the departure from normality is negligible for the PCI, while it is slightly more serious in the case of the DC.8

The second problem in the model is represented by the high correlation between two of the independent variables, i.e., inflation and realper capita income. The large correlation between them (r = .77) clearly testifies to the presence of multi- collinearity, which causes the standard error of the regression coefficients to become extremely large, thereby yielding unstable estimates and affecting their significance level (Kelejian and Oates, 1974). A situation of imperfect multicollinearity is often

394

corrected either by introducing additional information into the equation, or by creating a composite variable, which is a combination of the original ones. The first strategy is not feasible here, for, given the small sample size, we could end up with the abnormal situation of having as many independent variables as cases. The second strategy therefore seems more appropriate. However, instead of using a composite index, which could cause problems of interpretation of the results, I will simply use only one of the two independent variables: inflation. This choice rests on both theoretical and methodological considerations. First, previous research seems to show that change in the inflation rate has a greater and consistent impact on voting than change of income (Arcelus and Meltzer, 1975; Bloom and Price, 1975). Second, rising inflation also presupposes a rising income. That this is the case for Italy can be shown by regressing inflation on income; a R2 = .60 confirms the hypothesis.

TABLE 111. Influence of inflation and unemployment on the DC and PCI vote, 195S79

Party Constant Inflation Unemployment R2 DW

DC 38.2 -.I0 .37 .43 2.7

PCI 24.3 .67 - .33 .94 2.3 ( - 1.8)4 (1.3)

(.9)S3 (-1.718

N = 7. The values in parentheses are t-ratios 8 P < . l O one tail. 89: P < .05 one tail.

Therefore, we can be fairly confident that by using inflation we have also accounted for income. I must add, however, that my choice is fully dictated by methodological considerations, and that I do not advance a demand-pull explanation of inflation for Italy.

The preceding discussion suggests the following reduced model of electoral support:

V, = bo + blIt-l + bzUt-e t

where V,, I t - , , e, are defined as in the earlier model and bo, b,, b2 are the parameters to be estimated. The hypotheses are: for the PCI, b,, bz>O; and for the DC, b, , b2 < 0. The estimates from OLS regression appear in Table 111.

This second model performs better: three out of four coefficients reach the significance level, and autocorrelation has partially decreased. The findings are quite interesting and, furthermore, they are consistent with those of the former model. In general, we observe that the impact of economic conditions is different for the PCI and for the DC. Rising inflation in fact favours the Communists and hurts the Christian Democrats, while an increase in the jobless rate, surprisingly, affects the Communist vote negatively and the Christian Democratic vote positively.

Moving on to a further analysis of the Christian Democratic vote, we note first that the model fits the data quite well, as the coefficient of multiple determination shows: R2 = .43. The regression coefficient b, is significant (.lo level, one tail: /t/>1.5) and

395

points out that a 1 % increase in the rate of inflation produces a . 1 % drop in the party electoral support. The impact of unemployment is again positive: a 1% jump is associated with a .37% increase of the vote. However the lack of statistical signifi- cance still prevents us from drawing rigorous conclusions on the influence of this variable.

The model performs best with regard to the Communist Party, whose level of electoral support can be considered as a more accurate indicator of dissatisfaction and opposition to government policies. The high R2 .94 indicates a virtually perfect fit, and so does the higher level of significance of the regression coefficients, thus increasing our confidence in the model. The impact of inflation is relevant: 1% of change in the inflation rate brings about a .67% increase in party support, while, as already observed, unemployment hurts the Communists, since an increment of 1% in the jobless rate lowers the party’s share of votes one-third of a percentage point.

This last finding deserves some attention, especially if compared with the positive impact of unemployment for the DC. The mirror image that results seems to suggest a different sensibility of the electorate but, unfortunately, the nature of the data does not allow an exhaustive explanation. However, within the limits of an ecological analysis and the consequent impossibility of drawing secure inferences about the behaviour of individuals, an explanation can be advanced in terms of an uneven geographical distribution of unemployment and of the electoral strength of the parties. In fact, while the DC has traditionally been stronger in rural than in urban areas, the opposite is true for the PCI (Galli and Prandi, 1970; Sani, 1978); at the same time, the level of unemployment is higher in rural areas (especially in Southern Italy). Therefore, a higher level of unemployment is associated with a higher vote for the DC than for the PCI. This inference is consistent with the findings from studies cited above, which show that the Communist electorate tends to be more urban, industrial and in employment than that of the DC. But this structural differentiation of the electoral base of the two parties alone cannot explain the ‘wrong’ sign of the unemployment coefficient. We must also consider the peculiar and complex nature of the relationship which links the Italian electorate to parties. Parisi and Pasquino (1977) have proposed a theoretical framework which postulates the existence of three types of electoral relationship: the vote of belonging (voto d’appartenenza); the exchange vote (voto di scambio); the opinion vote (voto d’opinione).

While in the last decade a striking feature of the Italian electorate has been the growing importance, both in relative and absolute terms, of the opinion voters, in the wider period covered in the present analysis the role played by the first two types of vote was, and to a lesser extent still reasonably is, relevant. It is exactly the strength of the political subculture as well as the elector’s will to take advantage of the patron4ient network which the DC has firmly established since the 1950s that explains the positive association between unemployment and the incumbent’s electoral support. The demand for individualized policies - e.g., transfer payments as old-age pensions, disabled people’s compensations, etc. - arises particularly in economically weak areas with high unemployment. When satisfied, it further re- inforces the link with the incumbent party and its electoral support. Santagata (1982) reaches a similar conclusion in a cross-regional analysis of the 1979 national elections. He found that high unemployment is positively associated with the DC vote, due to the presence of the ‘voto di scambio’ which seems to prevail where unemployment is structural.

396

3. A REGIONAL TEST

The relevance of economic conditions for voting behaviour advanced here must be accepted with caution since it is based on a time series with only seven cases, not to mention the high level of aggregation of the data. The best check would then be to test the findings with survey data, trying to uncover an individual-level basis for the macro-relationship previously inferred. Unfortunately such data are not yet avail- able. Therefore we shall try to improve our confidence in the model by fitting the same equation for each of the several Italian regions in order to account for the diversity of the regional economic structures and parties’ support. This strategy,

TABLE IV. Influence of inflation and unemployment on the PCI vote by region, 1953-79

cost Inflation Unemployment K’ DW

Piemonte

Lombardia

Trentino

Veneto

Friuli

Liguria

Emilia Romagna

Toscana

Urnbria

Marche

Lazio

Abruzzo

Molise

Campania

Puglia

Basilicata

Calabria

Sicilia

Sardegna

23.7

19.8

4.0

14.8

19.9

28.8

43.5

39.2

38.7

29.1

23.3

24.4

15.5

22.1

25.6

26.3

21.7

23.5

20.0

.x7 (3.8)

.72 ( 3 3 )

.4Y

.53 (5.0)

.43 (5.4)

.69 (3.2)

.53

.71 (3.6)

.95

1.14

.75 (4.3)

.72 (3.8)

.7 I (4.0) .64

(4.7) .33

(2.8) .40

(5.6) .54

.24 (2.1)

.87 (4.5)

(2.8)

(2.7)

(2.7)

(2.4)

(2.4)

- .76 (-1.1)

- .52 (- .93)

.25 (.30) - .33

(-1.2) -.61 (2.1) - .69

(-1.2) -1.08

(-1.7) -.71

(-1.7) - .98

- 1.65

-.16 (- .42) - .56

-.I3

-.31

-.19 (- .98) -.19

(-1.4) .04

- .39 (-1.4) - .08

(- .25)

(-1.0)

(-1.2)

(-1.2)

(- .33)

(-1.1)

(.11)

.68

.73

.76

.84

.90

.61

.36

.75

.54

.57

.73

.71

.75

.77

.60

.89

.42

.42

.75

1.7

2.3

2.9

2.5

2.9

1.7

2.1

2.2

1.9

1.9

2.0

1.7

2.0

2.9

2.7

2.6

2.3

2.5

1.2

N = 7. The values in parentheses are t-ratios.

397

though it does not yet allow us to disentangle individual attitudes, enables us properly to consider the great diversity of the Italian economic structure as well as of the party support in different regions. Actually, this significant variance is reflected in different economic and political conditions which must be considered if we are to achieve a better understanding of the impact of economic conditions on voting behaviour. We have fitted our revised model to each region in order to investigate such diversity and to test the model further.'O

It can be seen from Tables IV and V that the relationship shows a great stability: inflation does hurt the DC and favours the PCI, while unemployment follows an opposite trend. But a more in-depth look is rewarding. First we notice that about

TABLE V. Influence of inflation and unemployment on the DC vote by region, 1953-79

cost Inflation Unemployment R* DW

Piemonte

Lorn bardia

Trentino

Veneto

Friuli

Liguria

Emilia Romagna

Toscana

Umbria

Marche

Lazio

Abruzzo

Molise

Campania

Puglia

Basilicata

Calabria

Sic i I i a

Sardegna

37.7

40.2

45.2

53.8

46.2

32.4

24.2

30.3

30.5

39.0

34.4

48.2

47.9

36.4

42.0

47.1

39.4

36.8

43.1

- .26

-.12 (- 36) - .76

(-.18) -.21

(-2.6) - .46

(-2.9) -.15

(-.74)

(4.7)

.03

-.12 (1.1) -.lo

(-1.3) -.18

(-1.3) - .04

(-.36) -.14

(-.71) -.lo

(-.34) .04

(.33) - .03

(-.18) -.lo

(-1.9) - .32 (2.3) -.18 (1.2) - .33

(-2.0)

(.29)

.38 .23 ( 3 5 ) .77 .45

(2.0) -.67 S O

(-.34) .I0 .53

(53) ,003 .59

(0.0) .75 .09

.79 .44

.51 .54

.14 .04 (.65) .53 .37

(1.4) .27 .05

(1.0) -.25 .06

.97 .05

.46 .15

.07 .03

- .06 .22

.67 .56

.44 .12

.I4 .29

(1.4)

(2.3)

(2.1)

(-.51)

(1.4)

(1.6)

(.27)

(-.18)

(2.6)

(1 .1 )

(57)

2.0

2.0

1.6

2.3

2.2

1.7

2.1

2.1

2.4

2.5

2.2

1.7

1.9

1.4

1.5

1.8

1.7

1.8

2.3

-

N = 7. The values in parentheses are t-ratios.

398

two-thirds of the coefficients are statistically significant at the .1 level, while half of them are so at the .05 level, undoubtedly a good result given the short time series. Second, the sign of the inflation coefficients is in the expected direction in virtually all regions - positive for the Communist opposition and negative for the incumbent - while the sign of the unemployment coefficients is not: contrary to our expectations this is, with just a few exceptions, consistently negative in all regions for the PCI and positive for the DC. Third, the size of the R2 is on average larger in the equations for the PCI than in those for the DC, thus pointing out a stronger impact of economic conditions on the PCI electorate than on the Christian Democratic one. This amounts to saying that the DC electorate has been relatively less prone to react to the economic performance of their party, while the vote for the PCI is also protest voting against a poor economic performance.

In summary, the regional test has shown that in spite of the diversity of political culture, tradition and economic structure, the impact of economic conditions on voting behaviour tends to be quite similar across Italy. The electors, concerned with the decrease in the purchasing power of their money and affected by higher prices, express their discontent with the government management of the economy by rewarding the opposition. But this process is neither automatic nor widespread: the data suggest that Christian Democratic electors are quite reluctant to abandon their party: for example, a 10% increase in the inflation rate brings about, on average, a loss of only 1.8% of the national vote. Similarly PCI voters, who react to inflation, seem unconcerned with increasing unemployment, as the negative impact of this variable shows.

However, it cannot be forgotten that these findings result from research on aggregate data and therefore must be assumed only as preliminary indications for further inquiry. But, at the same time, we should not underestimate the fact that the two economic indicators employed in the analysis seem to tap an important and substantive dimension of Italian voting behaviour. Of course, the nature of the data does not allow us to test individual attitudes; nor is it possible to assess whether the ‘observed’ economic influence arises from the voters’ global evaluation of the country’s state of the economy or rather from personal economic dissatisfaction (Kiewiet, 1982).

Within these limits, however, even a conservative and careful inference does not reject the hypothesis that economic conditions do exert an influence on electoral choice : rising prices affect people’s living-standards, and their dissatisfaction with the economic performance of the government finds expression in the ballot box, casting a vote for the main opposition party, i.e., the PCI. In this respect, the behaviour of Italian electors seems to follow a traditional pattern of rationality; they blame the incumbent for the economic mismanagement.

Unlike the impact of inflation on the vote, the interpretation of the unemployment variable is less straightforward. Actually the OLS estimates show that a higher unemployment rate is associated with a vote for the incumbent; the ruling party seems to be electorally favoured by an increase of the jobless rate. We can advance two alternative interpretations for this puzzling, and apparently ‘irrational’, unemployment-incumbent relationship: either the electorate does not hold the government responsible for the lack of jobs, i.e., unemployment stems from market fluctuations where the government role is perceived as having little or no impact at all and therefore cannot be responsible for it; or, more likely, the positive DC-

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unemployment relationship is spurious, reflecting the economic weakness of the region and people’s demand for individualized policies and compensations.

In our opinion this second interpretation provides a better explanation for the puzzling incumbent-unemployment association than the former one, which is con- futed by everybody’s daily experience. Moreover, it offers a rational framework to account for apparent irrational behaviour. On the contrary, it appears very rational to exchange electoral support for personal economic benefits with the party which can actually distribute them, namely the incumbent. As an example of such process we can consider the case of disability pensions.

It is well known that in the Italian version of the welfare state disability pensions have been one of the key ways of redistributing income, and often a strong, and permanent, surrogate for unemployment benefits. If we consider the geographical distribution of disability pensions, a clear pattern emerges. In 1970 in the whole country there were, on average, 91.7 disability pensions for 100 old-age pensions; but in Northern Italy this ratio was 62.3, while it was 127.0 in the central regions and 149.7 in Southern Italy. Ten years later the pension gap was even larger: there were 72.8 disability pensions for 100 old-age recipients in Northern Italy and as many as 290 in the South (CENSIS, 1983,214). If we take a different indicator - the number of disability pensions as a percentage of the labour force - again we notice a large variation of the regional values around the national mean value (24%): in 1980 the value in Piedmont was 20%, and 12% in Lombardy, but it was 50% in Molise, 40% in Abruzzi, 41% in Basilicata, and 38% in Sicily (CENSIS, 1983,216). In other words, more pensions have been granted in economically weaker regions of the country than in richer ones. Considering that the chances of a person being disabled should be more or less randomly distributed across the country, while the selection procedure for becoming eligible for such compensation is largely dependent on discretionary evaluations, we observe that, on average, DC electoral strength and its patron-client network follow quite well the geographical distribution of disability pensions. Of course this does not imply that the DC vote is completely explained by economic considerations of this kind; obviously the ‘voto di scambio’ (exchange vote) is but one of the determinants of the DC vote, though its impact provides an explanation for the unemployment-DC relationship which emerged in the analysis.

4. CONCLUSION

The present study has attempted to investigate the impact of the economy on the political preferences of the Italian electorate over a time span of 30 years. Such an impact is important even if not absolute, as was expected given the anticipated difficulties of a straightforward extension of the rational voter model to a polarized multi-party system. However, inflation did emerge as an important element in influencing the elector’s choice. In particular, we can expect a 1% increment of the inflation rate to produce, on average, a .18% drop in the Christian Democratic vote, while it increases the Communist vote by .55%. Contrary to our expectations, and to standard interpretation of rational voting, unemployment has a negative influence on the level of support for the Communist party. This contradictory finding, however, is far from suggesting a dismissal of the economic approach as inappro- priate. On the contrary it emphasizes the need to pursue this area of research further since little is known of how economic conditions, mediated by noneconomic

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variables, affect political behaviour. For the Italian case, furthermore, empirical evidence is extremely scarce and, even though research with aggregate data could still improve our knowledge, inquiry using surveys and panel studies now appears mandatory.

NOTES 1 See Sani (1973) for a brief but comprehen4ve survey of the major works and for an empirical

assessment of the different explanatory power of the three sets of variables. 2 Good surveys of the literature are presented by Monroe (1979) and Paldam (1981). 3 An extensive review and assessment of rational choice theory is presented in Budge and Farlie (1977.

4 A basic issue for voting as well as popularity function studies is whether the voters’ and the respon- dents’ evaluation of the state of the economy refers to the country as a whole, or is based on personal economic conditions. Even though the findings are far from conclusive, the studies available do not seem to confirm the latter hypothesis. See Fiorina, 1978; 1981; Kinder and Kieviet, 1979; Kieviet, 1982.

5 For a discussion of ideological distance among parties, and in particular in the Italian case. see Sartori (1976, ch. 6).

6 In statistical theory this situation is known as the problem of outliers. For a systematic treatment, see Pindyck and Rubinfeld (1981).

7 Inflation rates were computed from the figures reported in: International FinancialStatistics, Yearbook 1980 (International Monetary Fund: Washington, DC). Unemployment rates were calculated from figures for relevant years in: Annuario Statistic0 Italiano, Annuario diStatistichedel Lavoro, Annuario di Contabilita Nazionale (Istituto Centrale di Statistica: Roma). Real per capita income was computed from: G. Tagliacarne, 11 calcolo del reddito prodotto nel 1963, Moneta e Credito, Allegato 1, pp. 38690 (Time Series 195143), and from UNIONCAMERE: lconti economicidelle Province Italiane, Rome, various issues (Time Series 196&79).

8 A simple test of normality is to check whether for each dependent variable the mean value minus the median = 0, since a normal distribution has mean = median. For the PCI this difference is .34, while in the case of the DC it is .60. Departure from normality is therefore more serious for the DC.

9 Even though the lack of statistical significance prevents us from accepting the coefficients for the income variable, we must notice their signs: positive for the PCI and negative for the DC. This implies that a rising income is associated with a higher Communist vote while it depresses the DCvote. Though critical of the rational voter theory, this finding IS fully in line with previous research which shows that the Communist vote is stronger in wealthier and industrialized areasof Italy, while the DC electorate is more typical of agricultural and marginal areas (Bartolini, 1977,128-37; Sani, 1978,112-7).

10 The dependent variables - the percentage of votes for the PCI and the DC - represent the share of votes obtained by the parties within the region at national and regional elections. The regional inflation rates were computed from figures for relevant years in: Annuario Statirtico Italiano (Istituto Centrale di Statistica: Roma). Since different years were used in different series, they have been linked together by using the ratio of the first annual overlap and shifting the linked years to the base, 1976 = 100. The Valle d’ Aosta region is excluded from the analysis since there both the PCI and DC run in alliance with other parties.

chs 3-5).

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