How does globalization affect political change? This article attempts to answer this question by making some extensions to the retrospective voting model. If one peruses the data, government turnover among industrialized countries seems to be on the rise presumably due to the global recession in the aftermath of the “Lehman shock.” Inspired by the recent increase in political change among Organisation for Economic Cooperation and Development (OECD) member states, the article provides and tests a simple hypothesis that globalization may increase domestic political change by affecting the macroeconomic conditions of each country.
Very few studies have looked at the impact of globalization on domestic political change; therefore, the present theory builds on the retrospective voting model, which is well established and firmly verified in the American and comparative political economy literature. The retrospective voting model argues that voters punish incumbent politicians by voting against them when the economy is in adverse condition. The model implicitly assumes that “shocks” to the economy are internally derived, but this model could be extended by assuming that some adverse shocks come from abroad. If globalization increases the chances that adverse shocks from overseas affect macroeconomic conditions at home, voters may kick out incumbents with greater frequency, thereby increasing the incidence of government turnover. This hypothesis is called a “naive hypothesis” because it assumes a certain degree of naïveté on the part of voters in the sense that voters punish politicians for economic conditions which they cannot reasonably be presumed to have caused.
The article tests this hypothesis by using data from nineteen OECD member states which have been conducting free and fair elections throughout the postwar period. Government turnover is defined slightly differently under parliamentary and presidential systems. Under parliamentary systems,government turnover occurs if the head of government changes from the leader of one party to that of another party. Under presidential systems,government turnover occurs if a new president is elected (irrespective of her party). To assure robustness, two different datasets are used: one counts the number of government turnover per decade in each country, and the other dataset simply codes whether or not government turnover occurred as a result of each parliamentary or presidential election. The article finds: 1) that globalization affects both growth and inflation in a significant way; 2) that the adverse macroeconomic conditions increase the incidence of government turnover; and 3) that the net effect of globalization has been to moderately increase the incidence of government turnover among industrialized nations.