Exogenous shocks and citizens' satisfaction with governmental policies: can empirical evidence from the 2008 financial crisis help us understand better the effects of the COVID-19 pandemic?

ABSTRACT

I examine to what extend the financial crisis of 2008 affected levels of individual satisfaction with governments in general and three policy areas in particular; the economy, health services and education. I use data from the European Social Survey (9 rounds, 2002-2018, 14 countries, approx.195000 observations). Running Interrupted Time Series regressions I find that, on aggregate, there was a decrease of satisfaction with the government and the economy immediately after the crisis, but an increase for health and educational services. Longer term, satisfaction gradually increased for all the four indicators examined. In separate regressions for each country, a consistent pattern of behavior emerges. Where the short-term effect on satisfaction was negative, the long-term effect was positive, and vice versa. The switch, from short-term negative to long-term positive effect, could be attributed to the successful efforts of governments to correct the immediate adverse effects of the crisis. On the contrary, some individuals seeing the problems other countries faced, applauded their own government's short term performance in handling the crisis. With the passing of time however, they gradually became more critical. The COVID-19 pandemic has forced governments to implement policies reviving the economy and improving services in health and the education sectors, amongst others. Results of this study may be used when measuring and evaluating the effects of the current pandemic.