In "The Lottery" by Shirley Jackson, how does Jackson create a suspenseful story using third person?
This is a great question. The narrator of the short story is, indeed, a detached third person observer. From this perspective, we do not get the internal feelings from the villagers. In other words, we don't know what they are thinking, feeling, and anticipating. We don't get their real views, fears, and anxieties. All we are left with is a narrative, a play by play with no interpretation.
For example, Mrs. Hutchinson might be feeling great anxiety, but we don't get a sense of it. Here is what the narrator says:
Just as Mr. Summers finally left off talking and turned to the assembled villagers, Mrs. Hutchinson came hurriedly along the path to the square, her sweater thrown over her shoulders, and slid into place in the back of the crowd.
All of this is dramatic, because the plot is climaxing toward a ritual murder, where someone will be stoned. The reader naturally thinks: "Can this really be happening?" In other words, suspense fills the narrative. An appropriate word that describes the story is eerie. Also because the detached narrative is so incompatible with the act of ritual murder, the reader is left feeling off-kilter. Again this adds to the suspense.