Austerity, immigration or globalisation: was Brexit predictable?

Report by: Social Market Foundation

Author(s): Thiemo Fetzer

November 27, 2018

The UK vote to leave the European Union is widely seen as a watershed moment in UK History and European integration. Why did some areas vote to leave the EU, and others to remain? What lessons can be drawn from the referendum other than the result itself? The UK referendum on the European Union membership on 23 June 2016 is a key moment for European (dis)integration. Even though the outcome has been expected to be tight, in the days running up to the referendum bookmakers and pollsters predicted the remain side to win. Many observers were left puzzled and keen to understand who voted for Leave. There are two complementary ways to approach the result. One is to try to understand broad patters, i.e., to ask “Were some factors more important than others in explaining the overall pattern of the vote?” This perspective does not pause causal questions, i.e., it does not ask about counterfactuals: “How would regions have voted if, instead of experiencing X, they had experienced Y?” A researcher would have set up a randomized control trial before the referendum and exposed some regions or voters to one type of experience, and others to an alternative experience, to analyse how random exposure to an experience affects voting behaviour. We can get close to this by trying to consider situations where, beyond their control, some regions/voters were exposed to different experience – not by a team of researchers but by changes in economic policies – ad exhibited differential voting patterns. In this paper, we present evidence on these two complementary perspectives. We start by summarizing the findings on the broad patters of the Brexit vote. After that, we ask specifically whether austerity had a causal effect on the Brexit vote, i.e., whether less austerity after 2010 would have resulted in a lower Leave share.