Voters worldwide are angry about higher prices and keep punishing those in power

Kamala Harris, Rishi Sunak, Emmanuel Macron, and Narendra Modi.

From London to Tokyo, Seoul to Cape Town, 2024 has been a year of sharp election swings. Now you can add Washington D.C. to the list.

Donald Trump soundly beat Democrat VP Kamala Harris in the US election, faring better than in 2020 in virtually every part of the country and with nearly all demographic groups. The near-universal shift away from Democrats echoes voters’ rejection of incumbent political parties across the world this year.

The US vice president’s late substitution for Biden as the Democratic candidate, and her decision to embrace his policies instead of distancing herself from them, meant she effectively ran as an incumbent.

In contrast, Trump’s defeat in the 2020 presidential election race enabled him to run as a “change candidate” this cycle and promise to disrupt the status quo.

Voter backlash

Analysts have proposed many theories as to why Harris lost, ranging from her gender and race, to her failure to reach out to young men, to her support of Israel’s war with Gaza, to her campaign focusing too much on reproductive rights and preserving democracy and too little on immigration and the economy.

But from a global perspective, it’s little surprise she lost given how many incumbent governments on both the right and the left have received a drubbing this year. Here are just a few of them:

• Britain’s Labour Party ousted the Conservative Party, or Tories, this summer.
• France’s National Rally party secured more seats in the country’s assembly than in 2022.
• Japan’s Liberal Democratic Party ceded its parliamentary majority this fall.
• Indian Prime Minister Narendra Modi lost his majority against expectations, forcing him to form a coalition government.
• South Korea’s Democrat Party snagged a majority in the country’s legislature.
• South Africa’s African National Congress (ANC) party lost its majority.

Moreover, the incumbent US party has now lost three consecutive presidential elections for the first time in more than a century, Jim Reid, a research strategist at Deutsche Bank, said in a note this week.

Paying the price

Inflation has been a key driver of the voter backlash. Prices of food, fuel, housing, and other essentials took off during the pandemic as governments spent heavily and lockdowns snarled global supply chains. In the US, inflation hit a 40-year high of more than 9% in early 2022 and was still above the Federal Reserve’s 2% target this September.

“Trump’s victory is the most powerful example this year of a political and economic environment that has been brutal for incumbents around the world and brought home the fact that inflation is political kryptonite,” Tina Fordham, an independent strategist and advisor, said in a LinkedIn post this week.

A key consequence of inflation has been central banks raising interest rates to curb spending, hiring, and investing, cooling price growth. The Fed raised its benchmark rate from nearly zero to north of 5% in under 18 months, raising many people’s monthly payments on their credit cards, car loans, and mortgages.

The central bank made its first cut this September and trimmed a second time this week, broadly in line with peers such as the Bank of England and the European Central Bank.

Surging prices and steeper interest rates has squeezed households in the US and many other countries. Voters appear to be fed up with onerous living costs and eager to kick out the leaders they blame for their struggles.

Other issues, such as illegal immigration and the wars in Ukraine and the Middle East, have also spurred votes for change.

Demanding change

In the US, those concerns are so powerful that they’ve trumped the economic reality of resilient growth, historically low unemployment, declining inflation, falling rates, and a record stock market. In a CNN exit poll, 72% of Americans said they were dissatisfied with the country’s direction.

Louis Perron, a political consultant author of “Beat the Incumbent: Proven Strategies and Tactics to Win Elections,” said in a note this week that elections featuring an incumbent are “foremost a referendum on the incumbent.”

In Harris’ case, he said “it would have probably taken a miracle to overcome the circumstances with respect to inflation and the border.”

People “can’t pay for groceries with Democracy or reproductive rights,” he added. “If the mood of the electorate is so sour, people just want to stop the bleeding.”

Similarly, Deutsche Bank’s Reid wrote that voters are disappointed by how slowly their lives are improving amid cooler economic growth.

He said they don’t buy that incumbents can tackle immigration, some incumbent governments have had scandals, and voters have become “much more willing to change their vote from election to election.”