Fundamental attribution error

Andrew Leigh has a fascinating post at Core Economics, discussing Lee Ross's 'fundamental attribution error' in the context of the relationship between economic performance and election outcomes

... In a paper that we released last year, Mark McLeish and I showed that Australian state governments were more likely to lose office when the national economy turned sour. To check that our results weren’t being driven merely by the modest contribution that state leaders make to economic performance, we were able to show that our results held up even if we only used a purely unrelated source of growth – the US economy.

Why do Australian voters turf out their state governments when the US economy tanks? The answer seems to lie in something psychologists call ‘the fundamental attribution error’, which is the fact that humans aren’t very good at separating situational factors from ability when making assessments. So for example managers tend to be bad at taking task difficulty into account when assessing their workers, sports fans don’t appropriately adjust for field conditions when judging ability, and shareholders tend to overpay CEOs when the market booms. Consequently, it isn’t all that surprising that voters aren’t very good at separating out the component of economic growth that lies within the control of state politicians from factors outside their control.