Electoral Externalities in Federations - Evidence from German Opinion Polls

Party performance in state and federal elections is highly interdependent. Federal elections impact regional voting dynamics and vice versa (electoral externalities). We quantify the extent of simultaneous electoral externalities between two layers of government. We apply vector autoregressions with predetermined variables to unique opinion poll data for the German state of Berlin and the federal level in Germany. State voting intentions for the state and for the federal parliament are the endogenous variables; the federal election trend is treated as predetermined. Our results suggest that shocks in federal parliament voting intention impact state parliament voting intention, but – as a new finding – to the same extent also vice versa. Externalities account for around 10% to 30% of variation at the other level of government. The effects differ across parties. Electoral externalities are less pronounced for the conservative party, but increase in times of government. The opposite holds true for left-wing parties.