Bonds, Stocks or Dollars? Do Capital Markets influence Election Results in Brazil and Mexico?

How does vote intention in presidential elections vary according to the economic conditions of a country, especially indicators of the financial market? Does the state of the economy, both its fundamentals as well as capital market, affect variation in candidates' percentage of vote intention in national polls? This paper tests how economic indicators influence vote intention in presidential elections in two emerging markets: Brazil and Mexico. The presidential elections of 1994, 1998, 2002, and 2006 in Brazil and 2000 and 2006 in Mexico are analyzed using all poll returns for each electoral period and corresponding economic data. The paper finds that no theory is capable of explaining results throughout the dataset but partisan explanations and Stokes' (2001) categories of alternatives to retrospective voting help elucidate vote intention. [ABSTRACT FROM AUTHOR]