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The Political Economy of Populism: An Empirical Investigation

Abstract

Various macro-shocks arguably affect the demand for populism. However, there is no evidence beyond a few case studies. I expand electoral data on left- and right-wing populism and link them with per capita income, inflation, unemployment, government expenditures, income inequality, migration, trade and financial openness, and natural resource rents. Negative shocks in some of those consistently predict a surge in populist votes, even in the presence of inherent populist cycles. Shocks also affect election outcomes of left-wing and right-wing populists differently. Finally, European and Latin American voters are still different, yet converging, in their post-crisis preferences for populism.

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Notes

  1. For a detailed description of data collection methods, see Heinö (2016, pp. 13–15).

  2. See Rohac et al. (2017) for analysis on how right-wing populism in Europe correlates with economic institutions, and Gidron and Hall (2017) on additional social factors driving right-wing populist support.

  3. Most of the data for Europe and Latin America do not include refugees. Exceptions are: Bosnia and Herzegovina, Croatia, and Hungary in Europe, and Belize, Costa Rica, El Salvador, Guatemala, Honduras, Mexico and Nicaragua in Latin America. In those countries refugee data are included into the migrant stock estimates.

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Acknowledgements

Many thanks to Martin Rode (University of Navarra) for sharing The Wild Bunch! data and to Andreas Heinö (Timbro Institute) for sharing the Timbro Authoritarian Populism data. Two anonymous referees, and the participants at the 12th Young Economists Seminar of the 23rd Dubrovnik Economic Conference offered invaluable advice for further improvements, especially: Oleh Havrylyshyn, Ricardo Lago, Randall K. Filer, Paul De Grauwe, Yuemei Ji, and Vahagn Jerbashian. Luboslav Kostov provided helpful research assistance.

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Correspondence to Petar Stankov.

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Stankov, P. The Political Economy of Populism: An Empirical Investigation. Comp Econ Stud 60, 230–253 (2018). https://doi.org/10.1057/s41294-018-0059-3

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Keywords

  • Left-wing populism
  • Right-wing populism
  • Political economy
  • Populist cycles

JEL Classification

  • D72
  • P16
  • P48
  • P51
  • O57