Conclusions

The collapse of the Icelandic banking sector and the economic crisis that followed had significant effects on politics in Iceland. These were exemplified by protests organized (by the normally docile Icelanders) in front of parliament, the resignation of a minister (a highly unusual event in Iceland – see Kristinsson (2008)), and a call for an early election in which the Independence Party lost its status as the biggest party – a position it had maintained since Iceland became independent in 1944. It is also fair to say that the crisis shook the faith of Icelanders in the political system – trust in Althingi dropped from 40% before the crisis to 13%. The political parties received a fair share of distrust as well and came under criticism for not being democratic, engaging in favoritism, and catering to special interests. This distrust of political parties was highlighted by the Best Party’s victory in the Reykjavik election in

152 I.H. Indridason

2010. The Best Party was formed by a comedian – initially as a practical joke – but the party soon found that voters were quite willing to abandon the established parties in favor of a new one. Even if that party made promises such as to make a break with the corrupt practices of the established parties by being openly corrupt. The Best Party secured a plurality of the vote in the election, 34.7%, and the party’s leader became the mayor of Reykjavik. While the crisis has certainly led to events that will qualify as being important in

Icelandic political history, what is surprising is that the crisis has not affected the political landscape in a more significant way. Politics has returned to “normal” – any talk of staying united in the face of adversity quickly gave way to parties staking out their positions and, importantly, with MPs toeing the party line with the issue of membership in the EU being the one possible exception. The decision to seek EU membership appeared to be the most significant consequence of the economic crisis – prior to 2009 only one of the major parties had indicated willingness to enter accession negotiations with the EU. However, even this development has returned to “normal” with the IP-PP government withdrawing from the accession negotiations after taking office in 2013. The early election meant that there was very little time for the dissatisfaction with

the political parties to congeal in the form of new political forces capable of challenging the existing parties. The short amount of time provided new political entrepreneurs with limited opportunity to mobilize and build the organizational structures required to run for office. While the decision to call an early election was likely not motivated by concerns of the existing political elite to preserve their positions it appears likely that by doing so it ensured the parties’, and its representatives’, survival. This is not to say that the 2009 election did not result in an unusually high turnover of MPs. It did, but it was in substantial part due to the swing in the support of the parties rather than significant renewal within the ranks of the parties. It is clear that the economic crisis shaped the outcome of the 2009 election, e.g.,

voters sought to hold those responsible for the crisis to account, expressed their dissatisfaction with the political system, and EUmembership become a salient election issue at long last. But did the economic crisis have more long-lasting consequences. The early election of 2009 had largely shielded the existing parties from new challengers but new political forces had more time to organize ahead of the April 2013 election. The Civic Movement, the only successful protest party in the 2009 election, disintegrated, to be replaced by a number of smaller parties vying for representation in Althingi. The parties campaigned on issues such as debt relief for mortgage holders, a revival of the failed constitutional reform, and greater transparency. As a result the combined vote share of the four main parties in the 2013 election was only 75% and has rarely been smaller – the average vote share of the four biggest parties from 1963-2009 was 91%. Yet the impact of the new parties was limited thanks to the parties’ inability to coordinate their actions in the face of a 5% electoral threshold. Nearly 12% of the vote was wasted on parties that failed to cross the threshold. Only two of the new parties, Bright Future and the Pirate Party, won representation with, respectively, 8.2% and 5.1% of the vote. The Progressive Party having

The Collapse: Economic Considerations in Vote Choice in Iceland 153

shares between 2.2% pts. (IP) and 6.4% pts. (SDA).17 With institutional responsibility, the effects are substantially larger, especially with regard to the SDA, which is far more likely (+17.8% pts.) to receive votes from those that considered the banks and the FSA responsible. In contrast, these voters were less likely to vote for the IP (24.6% pts) and the PP (29.9% pts). Participants in the banking protests were less likely to vote for the parties on the

right of the political spectrum. Protesters were more likely to vote for the Left Movement (+14.1% pts) and the Civic Movement (+6.4% pts), and to a smaller degree the Social Democratic Alliance (+1.1% pts). Political Efficacy and Satisfaction w/Democracy were also found to affect vote choice. The Civic Movement was clearly the party of those disillusioned with the political system (22.6% pts and 211.4% pts, respectively). Interestingly the centrist parties, the Social Democratic Alliance (24.9% pts) and the Progressive Party (22.4% pts), were less likely than the parties on the left and the right to receive votes from voters that have a high degree of Political Efficacy. Voters with a high degree of Satisfaction w/Democracy, however, were somewhat less likely to vote for the Left Movement (21.0% pts) although the differences were not statistically significant at the 90% level. Figure 7 shows the effects of Political Efficacy on vote choice for the three elec-

tions. Interestingly, Political Efficacy appears to have declined in importance over time but there is not a significant shift after the crisis. Of course, the figure shows the effect of Political Efficacy and does not speak to the fact of whether voters’ sense of political efficacy has increased or declined. That is, it is quite possible that voters’ sense of political efficacy had declined from previous elections. However, political efficacy was a weaker predictor of party choice than in previous elections, which, perhaps, is not surprising, as a voter that beliefs that neither their vote nor the candidates they elect matters is likely to have strong preference about who she votes for. The declining effect of Political Efficacy is also consistent with Icelanders becoming acutely aware of their small economy being vulnerable to external circumstances and with a declining trust in politicians and political institutions in general.