Political Economy Model Forecast: The Left Will Win a Comfortable Victory in the Danish Parliamentary Elections

With the Danish general election just days away, what can forecasting models tell us about the outcome? Based on a model characterized by economic growth, Richard Nadeau, Michael S. Lewis-Beck and Karina Kosiara-Pedersen predict a comfortable victory for a leftist coalition led by the ruling Social Democrats.

Prime Minister Mette Frederiksen, centre-left leader of the Danish government, has called for general elections to be held on November 1. An allied party, the Social Liberals, had threatened a vote of no confidence if an election was not held, in light of a report critical of the government’s order to cull all mink for reasons of health during the Covid-19 pandemic.

Frederiksen hopes to build a broad coalition of parties, bridging the left-right divide, thereby replacing the one-party minority government of Social Democrats she currently leads. The unusual bipartisan gesture comes during the country’s troubled times, including soaring gas prices and claims that Frederiksen and his one-party government have been too powerful and opaque, not just when dealing with Covid-19 and the slaughter of mink. Faced with these difficult times, some polls suggest that she should be afraid.

Besides the polls, what does the other systematic evidence suggest? To predict the last Danish election (2019), we developed a political economy model in advance that successfully predicted the outcome of this competition. We now apply this same model, updated to forecast the 2022 election. The model is based on fundamental economic and political forces acting on the electorate. With regard to the economy, the focus is on economic growth in the run-up to the elections. As for political issues, their currents are captured in retrospective aggregate voting intentions. The theory is tested against data from the last 21 general elections, 1964-2019.

Given the complex multi-party nature of the Danish system, the electoral outcome to be predicted might not seem obvious. However, the system itself offers some useful regularities. Specifically, there are key Danish parties, accounting for nearly 70% of the total vote, that have been around for a very long time: the Social Democrats and Social Liberals (which can be lumped together in a left-wing coalition); and liberals and conservatives (which can be grouped into a right-wing coalition share).

For the 2022 election, the size of these two coalitions can be measured simply by using opinion polls measuring voting intentions. We use our standard time frame of three months, with an estimate end of July/beginning of August (average of two Epinon and Voxmeter surveys). Based on these surveys, we calculated the expected voting intentions for each of these four major parties at 23.6% for the Social Democrats and 6.5% for the Social Liberals (30.1% for the coalition left), with 14.7% for the liberals and 12% for the conservatives (26.7% for the right-wing coalition).

We see that the Social Democrats would still dominate the left coalition and that the left coalition would be larger, with a lead of 3.4 percentage points. However, when the share of the left coalition is calculated as a proportion of the votes for the two coalitions, it is only 53%. This margin, while positive for the left, is narrow and suggests that the race is indeed close, according to the polls.

However, the picture changes when considering the economy. Elsewhere, the impact of the economy on the Danish voter has been well demonstrated. The economic measure we focus on here is economic growth before the election, specifically the previous three quarters (t-9 GDP, the annual growth rate of the three quarters before the election). This growth figure shows robustness, at 6.6 percentage points, reflecting well the recovery of the Danish economy after the Covid-19 pandemic.

We “synthesize” these two measures of independent variables together in a regression equation, to predict the proportion of left votes based on these political and economic fundamentals. Estimating this equation with ordinary least squares yields a forecast of 58.4% for the left coalition. This strongly suggests a victory for the left-wing coalition. Why? Because over the entire electoral series, when a left-wing coalition has won, its vote represents, on average, 55.4% of the total support for these four permanent government parties. Our current estimate of 58.4% is 3 percentage points above this benchmark.

So once economic performance is factored in, as it should be, a Social Democrat-led coalition appears to be heading for a clear victory. This is, of course, at odds with the picture polls have often painted of a race too close to be called. That doesn’t seem to be the case now. The bottom line leads to a victory for the left, with the economy as the crucial factor.

Note: This article gives the point of view of the authors, and not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured Image Credit: European Union