Date of Award:

5-2016

Document Type:

Thesis

Degree Name:

Master of Science (MS)

Department:

Economics and Finance

Committee Chair(s)

Randy T. Simmons

Committee

Randy T. Simmons

Committee

William F. Shughart II

Committee

Ryan M. Yonk

Committee

Chris Fawson

Abstract

On July 5, 2015, Greek voters were asked to vote on whether the country should accept the terms of austerity offered by the European Union for bailout from the country’s financial crisis. With a turnout rate of 62.5% overall, 61.3% of Greeks voted “no.” While a majority of voters in every district opposed the bailout’s terms, the margin against the proposed austerity measures ranged from 51.2% in Lakonias to 73.8% in Chanion. This paper explores whether political parties influenced Greek voters’ decisions to accept or reject the EU's budgetary reforms. We first review the literature relevant to that question, focusing on whether party platforms are merely “cheap talk” or instead are salient in determining electoral outcomes. We then test our hypotheses empirically at the voting district level.

In this model, our key independent variable is party influence, which is measured by party vote shares in the nationwide election held in January of 2015. The dependent variable is the percentage that voted “no” to austerity in July 2015 in each of Greece’s 56 electoral districts. We also control for average age and the unemployment rate across regions, as well as the fraction of first-time voters in each electoral district. After conducting simple regression analysis, we report evidence that a pro-austerity party (New Democracy) was a significant factor impacting the results of the referendum. This research finding bolsters the claim that parties can shape electoral outcomes on questions decided by an institution of direct democracy.

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