Voters in developing countries use the stock market's fluctuations as a 'cheat sheet' to figure out which political candidates are actually competent.
While we usually think of voters as being driven by ideology or policy, this study finds that citizens look at financial market reactions as a credible expert 'review' to decide which leader will be better for the economy.
Financial Markets and Mass Political Attitudes: Evidence from the 2022 Brazilian Election
SocArXiv · 8b5r6_v2
How do financial markets affect mass attitudes toward candidates in democratic elections? We theorize that, especially in financially open countries in the Global South, voters respond to financial market assessments of candidates for national election. We expect that they do so via two mechanisms: first, voters may be aware that financial market movements can affect material outcomes, such as the prospects for future economic growth and the likelihood of debt distress. Second, voters rely on fi