Hibbs's partisan theory
Nordhaus (1975) proposed the opportunistic political business cycle model in which incumbents stimulate the economy before elections. Hibbs (1977) argued instead that parties pursue the interests of their core constituencies, not only votes. Because unemployment hurts workers most and inflation hurts asset holders most, left parties choose lower unemployment on the Phillips curve and right parties price stability. He confirmed these differences with data from Western countries.
Rational partisan theory
Alesina (1987) introduced rational expectations, arguing that because election outcomes are uncertain, wage contracts reflect the average of expected party policies, so partisan effects on the real economy appear only temporarily early in a term. The prediction is a temporary boom after a left victory and a temporary slowdown after a right victory, with only inflation differences persisting. Alesina, Roubini and Cohen (1997) offered supporting evidence from OECD countries.
Extensions and assessment
Hibbs (1987) analyzed the US political economy, linking voters' economic evaluations and party policy. Boix (1998) argued that in open economies party differences appear less in demand management than in supply-side strategies such as public investment and human capital, connecting to power resources theory. Franzese (2002) reviewed the field and concluded that partisan effects are conditional on central bank independence, capital mobility and institutional context.
FAQ
- What is partisan theory in simple terms?
- Left parties care more about jobs and right parties about stable prices, so economic policy and results depend on who is in power.
- How does it differ from political business cycle theory?
- Political business cycle theory says all incumbents boost the economy before elections, while partisan theory says parties pursue different economic goals altogether.
Sources reviewed: 2026-10-26
References
- Nordhaus, W. D. (1975). The political business cycle. The Review of Economic Studies, 42(2), 169–190. Opportunistic cycles.
- Hibbs, D. A., Jr. (1977). Political parties and macroeconomic policy. American Political Science Review, 71(4), 1467–1487. The founding article.
- Hibbs, D. A., Jr. (1987). The American political economy: Macroeconomics and electoral politics. Harvard University Press. US evidence.
- Alesina, A. (1987). Macroeconomic policy in a two-party system as a repeated game. The Quarterly Journal of Economics, 102(3), 651–678. Rational partisan theory.
- Alesina, A., Roubini, N., & Cohen, G. D. (1997). Political cycles and the macroeconomy. MIT Press. Cross-national evidence.
- Boix, C. (1998). Political parties, growth and equality: Conservative and social democratic economic strategies in the world economy. Cambridge University Press. Supply-side partisan strategies.
- Franzese, R. J., Jr. (2002). Electoral and partisan cycles in economic policies and outcomes. Annual Review of Political Science, 5, 369–421. Comprehensive review.