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Economics of Governance

, Volume 16, Issue 1, pp 73–96 | Cite as

The Wild Bunch! An empirical note on populism and economic institutions

  • Martin RodeEmail author
  • Julio Revuelta
Original Paper

Abstract

The debate on populism has recently been revitalized by the rise of new political actors, especially in Latin America and Europe. Despite the renewed interest, the concept of populism remains vague, complicating any empirical investigation on its political and economic outcomes. Still, all populist politicians strongly emphasize the defense of the common man’s interest against those of privileged elites, suggesting that such governments will have notable implications for economic policy and institutions. Using a non-partisan indicator of populism, this paper seeks to assess the impact of populist policies on institutional change, as measured by the economic freedom of the world index. Results indicate that populist governments actively reduce economic freedom. In particular, they erode legal security, reduce freedom to trade, and tighten economic regulation. Findings expand on previous research with empirical methodology, questioning the importance of ideological orientation in some definitions of populism.

Keywords

Populism Democracy Economic institutions Economic policy 

JEL Classification

N20 P44 P48 

Notes

Acknowledgments

The authors would like to thank the following persons for making helpful comments on earlier versions of the paper: Niclas Berggren, Andreas Bergh, Christian Bjørnskov, Sebastián Coll, James Gwartney, Kirk Hawkins, and two anonymous reviewers.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  1. 1.Departamento de Economía, Campus UniversitarioUniversidad de NavarraPamplonaSpain
  2. 2.Departamento de EconomíaUniversidad de CantabriaSantanderSpain

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