The spread of populism in Western countries


Luigi Guiso, Helios Herrera, Massimo Morelli, and Tommaso Sonno in

Several studies have addressed the issue of populism recently. Algan et al. (2017) study the political consequences of the Great Recession in Europe, documenting that in post-2008 elections, EU regions experiencing higher unemployment gave more support to populists. They also document that regions where unemployment rose experienced the sharpest decline in trust in institutions and traditional politics. Dustman et al. (2017) report similar results, showing that in the aftermath of the crisis, mistrust towards European institutions – largely explained by worse economic conditions in Eurozone countries – is positively correlated with populist voting. Foster and Frieden (2017) nuance this result using individual characteristics from the Eurobarometer survey data, and also show how the link between mistrust and populism is more pronounced in debtor countries. Inglehart and Norris (2016) observe that cultural variables affect the decision to vote for a populist party (instead of abstaining or voting for a non-populist party) more than economic variables. But their finding of a weak direct effect of economic variables is due to the fact that they fail to observe that economic security shocks significantly affect the incentive to abstain, which is instead the key intermediate channel that we emphasise in our research.

Beside the fact that these studies do not consider the crucial role of the incentive to abstain from voting, the other distinguishing feature of our work is the balanced effort to understand both demand and supply of populism, rather than focusing exclusively on the demand side. Rodrik (2017) is the only recent paper that focuses on the supply side. He traces the origin of today’s populism (mainly, if not uniquely) back to the globalisation shock, arguing that past history as well as economic theory imply that waves of globalisation can predictably lead to a populist backlash with a specific timing (when the shock hits) and geographical pattern (in countries that are most adversely affected by globalisation).

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