Working within a selection model of economic voting we propose explanations for the cross-national and dynamic variations in the magnitude of the vote that have puzzled students of comparative voting behavior. Our theory suggests that unexpected shocks to the economy inform the economic vote which implies that voters are able to resolve a signal extraction problem: determine the extent to which these shocks are the result of incumbent competency as opposed to exogenous shocks to the economy. We assume that voters have information on the overall variance in shocks to the macroeconomy and that they use this signal to weight the importance of economic shocks in their vote decision. Voters are also hypothesized to recognize that higher exposure to global trade influences reduces the magnitude of the incumbent competency signal. We provide empirical evidence demonstrating that voters are able to discern significant variation in macroeconomic outcomes in order to perform this signal extraction task: We analyze a six-nation survey conducted by the authors that was designed to assess whether voters are attentive to variance in economic outcomes and whether these in fact conditioned their economic vote. Secondly we examine economic time series from 19 countries over the 1979–2005 period, demonstrating that variances in the macroeconomic series explain contextual variations in the economic vote as our theory hypothesizes. Finally, the essay demonstrates that open economies, which are more subject to exogenous economic shocks, have a smaller economic vote than countries with economies less dependent on global trade.
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