The belief that a strong economy guarantees an incumbent’s re-election has long been a staple of political wisdom and the 2024 elections will be no different. This idea suggests that voters are driven by their wallets. As a result, they reward those in power when times are good and oust them when financial hardship looms. However, the relationship between economics and electoral success is more nuanced.

However, research shows that policy manipulation geared towards boosting the economy isn’t a gamechanger for incumbents. It can actually have some serious blowback, too. The U.S. stands out as a place where inflation, rather than economic growth, significantly impacts the odds of re-election. As 2024 elections approach, a polarized electorate further complicates the picture. Voters’ strong partisan biases will likely distort their perceptions of candidates’ economic track records. This challenges the trend that the economy drives electoral outcomes.

Allan Drazen knows this trend best. The professor of economics at the University of Maryland is an expert on political economy. Drazen focuses on topics like fiscal policy, monetary policy, and economic reforms. He has extensively researched the effects of economic conditions on electoral politics. His knowledge offers a nuanced understanding of the complex interplay between policy decisions, economic indicators, and voter behavior.

Drazen’s Thoughts

“Does data for the economy affect election outcomes? How might it affect the outcome of the 2024 election? And are there specific indicators such as food prices that matter? The conventional wisdom is that incumbents use economic policy to help their re-election prospects, leading to what is termed a political business cycle. 

“Research indicates that policy manipulation is generally ineffective in helping incumbents get re-elected, in fact, may backfire if it is seen as politically motivated. In developed countries, with the exception of the United States, the effect of economic growth on re-election has been found to be generally insignificant. In contrast, inflation, both in the election year and during the leader’s term of office, has a significant negative effect on the probability of re-election in the U.S. and in developed countries in general. High nominal interest rates have a similar effect, even though the president arguably has little control over either inflation or interest rates. 2024 would be different. The high level of partisanship that characterizes the current electorate suggests that perceptions of the candidates are very biased. Hence, views of what likely nominees have or have not done in the economic sphere and implications for voter choices will be similarly inaccurate”