We develop an incomplete-information theory of economic voting, where voters’ perceptions of macro-economic performance are affected by economic conditions of people similar to themselves. Our theory alleviates two persistent issues in the literature: it shows how egotropic motivations can lead to behavior that appears sociotropic, and why relying exclusively on aggregate data may underestimate the amount of economic voting. We test our theory using both cross-sectional and time series data. We document new stylized facts in aggregate data: state-unemployment is robustly correlated with national economic evaluations and presidential support. A novel survey instrument that asks respondents their numerical assessment of the unemployment rate confirms that individuals’ economic perceptions respond to the economic conditions of people similar to themselves. Further, these perceptions associate with individuals’ vote choices.

A key challenge for political and economic development lies in generating broad coalitions that span economic and ethnic divisions. We measure the effects of a particular mechanism—shocks to trade—in mobilizing the Indian subcontinent’s remarkably diverse population into one of the world’s first mass political movements in favour of Independence. Using novel data, we find evidence that residents of exports-producing districts that were negatively impacted by the Great Depression and Britain’s policy shift from free trade to an imperial preference regime favoring British manufactures were more likely to support the Congress, the party of independence, in 1937 and 1946 and more likely to engage in violent insurrection in the Quit India rebellion of 1942. However, districts experiencing both positive and extreme negative shocks were associated with lowered support. We interpret our results as inconsistent with a “peasant rebellion” interpretation of India’s independence and instead as reflecting the role of the Great Depression in aligning the incentives of South Asia’s producers of exportable goods (broadly, providers of the labour) with import substituters (providers of the capital) in favour of political independence, even while Imperial protectionism forged new pro-Empire constituencies.