Do Inconsistent Public Opinions Explain Inconsistent Policies?

ABSTRACT

This paper examines whether inconsistent public sentiments on capitalism may lead governments to adopt incoherent economic liberalization packages characterized by uneven attention to different policy areas. We propose that inconsistent sentiments obstruct political consensus‐building on reform trajectory within governing coalitions. These questions are explored empirically using a sample of up to 25 postsocialist countries during the initial phase of their market transition (1991–2001). We present evidence that ideological inconsistency of the median voter—defined as the standard deviation of median capitalism‐related sentiments among likely voters—is associated with more fractionalized governing coalitions along party lines and that, in turn, higher government fractionalization increases the dispersion of promarket policies. Countries with greater economic policy dispersion have historically experienced lower income growth rates, highlighting the importance of maintaining balanced reform paths.