Economic downturns and the Greek referendum of 2015: Evidence using night-time light data

Abstract

Much like Brexit, the Greek bailout referendum of 2015 could have been a watershed event that significantly affected the European Economic and Monetary Union and possibly the European Union as a whole. While the referendum did not live up to the hype, the fact remains that the Greek people decided to risk ‘exit’ and reject their international creditors’ bailout terms. In this article, we explore how the cycle of sovereign debt crisis, the externally imposed austerity and the resulting recession affected the outcome of that referendum. We further provide a limited test for the ‘left-behind’ hypothesis, which has been a prominent explanation for recent ‘unexpected’ or ‘surprising’ choices that have been made at the polls. Using municipality data and novel data sources, such as night-time light transmission, we provide aggregate-level support for our expectations.