Do voters reward national leaders who are more competent economic managers, or merely those who happen to be in power when the world economy booms? According to rational voting models, electors should parse out the state of the world economy when deciding whether to re-elect their national leader.
Andrew Leigh tests this theory using data from 268 democratic elections held between 1978 and 1999, comparing the effect of world growth ('luck') and national growth relative to world growth ('competence'). He finds that voters are more likely to reward competence in countries that are richer and better educated. Controlling for income, higher rates of newspaper readership reduce the returns to luck, while higher rates of television viewing reduce the returns to competence.