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ECONOMIC optimism is on the rise around the world. A new survey from the Pew Research Centre, a think-tank, finds that residents of America, Europe and Japan are more confident about their countries’ economies than they were before the financial crisis. Rising spirits partly stem from the return of durable growth. But differences in optimism between countries cannot be accounted for by growth alone—or, indeed, by economic performance.
To take one example, the German economy is projected by the IMF to grow at a similar rate to France’s. Yet whereas 83% of Germans believe their economy is doing well, only 21% of French people feel the same way. That suggests some other factor may be at play—perhaps the unemployment rate, which is much lower in Germany than in France.
Moreover, data compiled within specific countries suggest that economic optimism may not have much to do with the economy at all. The Pew report finds that respondents whose preferred political party is in power tend to be more optimistic. For example, Venezuela’s GDP is expected to plummet by 7.4% in 2017; food shortages there are so severe that three-quarters of Venezuelans have lost weight involuntarily in the past year. Nonetheless, 49% of left-leaning Venezuelans—who tend to support Nicolás Maduro, the country’s president—think the economy is performing well, compared with just 11% of conservatives.
Elections can make the role of partisanship in economic sentiment even clearer. In America, 58% of respondents describe the state of the economy as “good”, up from 39% a year earlier. Yet underlying economic conditions today are broadly similar to last year’s, and Democrats’ beliefs about the state of the economy have not changed. What has altered is the occupant of the White House and the composition of Congress. The share of Republicans who think that the economy is doing well has surged over the past year, from 31% to 61%.
