Reversal of fortune for political incumbents after oil shocks
Arezki, R., Djankov, S.
, Nguyen, H. & Yotzov, I.
(2020).
Reversal of fortune for political incumbents after oil shocks.
(Financial Markets Group Discussion Papers 805).
Financial Markets Group, The London School of Economics and Political Science.
, Nguyen, H. & Yotzov, I.
(2020).
Reversal of fortune for political incumbents after oil shocks.
(Financial Markets Group Discussion Papers 805).
Financial Markets Group, The London School of Economics and Political Science.
This paper explores the effect of oil shocks on electoral outcomes. Using a new polling and election dataset for 207 elections across 50 democracies, we show that oil price increases systematically lower the odds of reelection for incumbents. We verify that these shocks-which reduce consumption growth-are associated with worsening performance for incumbents in the run-up to reelection and a reversal in the leaning of the political party in power post-election.