Foreign Exchange Crises, International Currency Exposure and Elections
Franck Malan  1, 2@  , Etienne Farvaque  3, *@  , Eiji Fujii * @
University of le Havre
25 rue Philippe Lebon, 76600 LE HAVRE -  France
2 : Université du Havre  (Laboratoire EDEHN)
URCOM Université du Havre
3 : Université de Lille  (LEM)
Université de Lille - Sciences et Technologies
* : Auteur correspondant

If democracies are more prone to currency crises, how does this impact incumbents' electoral fortunes? This paper hypothesizes, (i), that the relation between crises and elections is related to the length and severity of the economic consequences of the currency crises, which in turn, (ii), depends on the degree of mismatch between a country's trade relations and its international indebtedness. A mismatch index is thus computed for 48 Middle and Low Income Countries over the period 1976-2014, and the evolution of the mismatch over time is analyzed. The relation between the mismatch index and the labor share of GDP and incumbent politicians' electoral fortunes is then estimated for the 1990-2014 period. The empirical results bring mixed support to the reasoning, as labor share is shown to be related to the mismatch indicator, while the influence of mismatch on the electoral fortunes of the incumbents is, at best, weak.

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