Abstract
In this chapter we argue that citizens take into account the degree of a government’s political autonomy to implement particular policies when expressing their views on satisfaction with democracy (SWD), but in order to do so, they need to perceive it. When citizens directly observe the external constraints that reduce their government’s autonomy, then variations in levels of regime satisfaction may no longer be exclusively about government performance, as widely argued by political economists, but also about democratic choice. Our argument develops after comparing the existing scenarios in the Eurozone before and after the Great Recession. Citizens only began to perceive their own lack of choice to decide between policy alternatives when the sovereign debt crisis broke out in May 2010, the date of the first Greek bailout. It is then when citizens started to update their beliefs about the functioning of democracy as a system in which alternative policies can be adopted as bailout deals were signed between national governments from the Euro periphery and the Troika. This updating process toward the way democracy works explains the increasing gap in the levels of SWD between bailed-out economies and the rest of the countries in the Eurozone. We find empirical confirmation for this claim after analyzing Eurobarometer surveys from 2002 to 2014 and using a two-step difference-in-difference analysis that combines individual and aggregate data.
The copyright of this article belongs to John Wiley and Sons under the license number 4031950824262. This is a slightly revised reprint of an article that originally appeared in the European Journal of Political Research (EJPR), 56(2):320–345. Wiley and Sons granted permission for reprint in this volume. Our thanks go to John Wiley and Sons and both authors.
This article has benefited from comments from many colleagues. We are especially grateful to Shaun Hargreaves Heap, Kostas Matakos, Gabriel Leon, Miguel Almunia, Lee Savage, Edoardo Bresanelli, Damien Bol, Alexander Afonso, Anna Gwizada, and José María Maravall. We have also greatly benefited from the detailed comments of the EJPR anonymous reviewers.
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- 1.
See, for example, The Economist 9 April 1998.
- 2.
Fieldwork for this survey was carried out between the end of 2012 and the beginning of 2013, 2 years into the bailouts and with the economic recession still at large.
- 3.
Even if many critics find these models wanting due to the fact that people have partisan and ideological biases that forestall a truly Bayesian belief updating, Bullock (2009) has demonstrated that the presence of partisan bias is compatible with Bayesian learning.
- 4.
The exact questions are as follows: “Have you heard of the European Commission?” “Have you heard of the European Central Bank?” The questions, therefore, measure objective knowledge: whether the respondent knows about the existence of these institutions.
- 5.
In this respect, we expect some countries outside the intervened in group to have more amenable citizens to belief updating than others as a result of past political experience. France, for example, already had the experience of being forced into line during the second half of the 1980s, when the Mitterrand government was constrained into taking a monetary policy that was compatible with the prevailing European orthodoxy (Moss 2000).
- 6.
The list of Eurobarometers (EB) used in our dataset is the following: EB58.1, EB60.1, EB62, EB63.4, EB65.2, EB68.2, EB72.4, EB73.4, EB76.3, EB78.1, EB80.1, and EB81.4.
- 7.
We also include Cyprus who joined the Eurozone in 2008 (see fn 11).
- 8.
The original EB question has four categories: “very satisfied,” “fairly satisfied” “not very satisfied,” and “not at all satisfied.” Since we are just interested in explaining temporal cross-country variation of levels of SWD, a binary variable is better suited for our analysis (see also Armingeon and Guthmann 2014). This decision is further justified by the distribution of the original SWD variable whereby about 80% of the cases are concentrated in the categories “fairly satisfied” and “not very satisfied.”
- 9.
The reason for doing this is to have a group of countries with a sufficiently large time span where the Eurozone rules have applied and been held constant. The countries considered joined the Eurozone between 1999 and 2002: France, Belgium, Netherlands, Germany, Italy, Luxembourg, Ireland, Greece, Spain, Portugal, Finland and Austria. To further test our hypotheses we also include Cyprus, which joined the Eurozone in 2008. The rationale behind this is that Cyprus was bailed out in 2013. This is also the logic behind the exclusion of Malta, Slovenia, and Slovakia. In any case, the analysis does not change if these three countries are included.
- 10.
The EBs used in this analysis do not include the question “satisfaction with economy.” Instead, they include a question asking the respondents to indicate their views on the economy. Such a variable has three categories: better, worse, and same. We decided to exclude this variable from the individual analysis to reduce the level of endogeneity. It is unclear which direction the causality between SWD and expectations on the economy takes. It could be argued that expectations on the economy do actually explain SWD, but it could also be argued the other way round. If that is the case, the coefficients would be biased and would contaminate our analysis. We analyzed this issue by running an auxiliary regression (ordinal logit) using expectations on the economy as the dependent variable and SWD as an independent variable, keeping all other variables as controls. In such a model, SWD is strongly significant and the direction of the coefficients is the one we would expect. More satisfaction with democracy increases the probability of having better economic expectations (SWD = 0.03***).
- 11.
This variable is also categorical and has ten values: “up to 14 years” (base), “15 years,” “16 years,” “17 years,” “18 years,” “19 years,” “20 years,” “21 years,” “22 years and older,” and “still studying.”
- 12.
The base category is “self-employed” followed by “managers,” “other white collars,” “manual workers,” “house person,” “unemployed,” “retired,” and “student.”
- 13.
The models displayed here do not include ideology as a control variable. This is because ideology was not included in all the EB analyzed here. We have, however, run the same regressions including ideology for the EB which included this variable, and the results are essentially the same to the one reported here.
- 14.
We also used the weights generated by the EB with similar results.
- 15.
Let us recall that a Troika intervention is defined as either the signature of a MoU (Greece and Ireland in 2010, Portugal in 2011, and Cyprus in 2013), the signature of a partial MoU (Spain in 2012), or an explicit threat from the ECB to let the country under attack by financial markets fall unless it implements an austerity package (Spain and Italy in 2011).
- 16.
Eurobarometers did not ask about SWD in 2008.
- 17.
Cyprus signed a MoU in 2013 but this year is excluded from the analysis given that the series ends in 2014.
- 18.
Data comes from Eurostat and it indicates the general government deficit (−) and surplus (+).
- 19.
Angrist and Pischke (2014) indicate that this interaction is required when the data has a pooled cross-country time-series structure like this one.
- 20.
Data from 2009 comes from EB 72.4, which was conducted between October and November 2009. Using data from the last term of 2009 enhances the logic to use 2009. Unfortunately, the Eurobarometers did not ask about SWD in October/November 2008.
- 21.
Table 9.5 in the Appendix shows all information regarding this model.
- 22.
The Prime Minister of Spain, Mariano Rajoy, bluntly admitted that: “We Spaniards cannot choose, we do not have the freedom to do so.” See interview in Spanish newspaper EL PAIS on 11.7.2012.
- 23.
Countries include Portugal, Greece, Spain, and Italy. We also include Ireland since the MoU was signed at the end of 2010.
- 24.
The Appendix shows the table containing all the details of these models.
- 25.
Full models are available upon request.
- 26.
Data can be accessed at https://data.oecd.org/hha/household-disposable-income.htm.
- 27.
We also re-estimated the models using the category “not very satisfied” with the way democracy works.
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Appendix
See Tables 9.4, 9.5, 9.6, 9.7, and 9.8
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Ruiz-Rufino, R., Alonso, S. (2018). Democracy Without Choice: Citizens’ Perceptions of Government’s Autonomy During the Eurozone Crisis. In: Merkel, W., Kneip, S. (eds) Democracy and Crisis. Springer, Cham. https://doi.org/10.1007/978-3-319-72559-8_9
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