How Voters Respond to Currency Crises: Evidence From Turkey

A burgeoning literature shows that international trade and migration shocks influence individuals’ political attitudes, but relatively little is known about how international financial shocks impact public opinion. This study examines how one prevalent type of international financial shock—currency crises—shapes mass political attitudes. I argue that currency crises reduce average citizens’ support for incumbent governments. I also expect voters’ concerns about their own pocketbooks to influence their response to currency crises. Original survey data from Turkey support these arguments. Exploiting exogenous variation in the currency’s value during the survey window, I show that currency depreciations strongly reduce support for the government. This effect is stronger among individuals that are more negatively affected by depreciation, and it is moderated by individuals’ perceptions of their personal economic situation. This evidence suggests that international financial shocks can strongly influence the opinions of average voters, and it provides further support for pocketbook theories.