Skip to main content

The Political Economy of Populism: An Empirical Investigation


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.

This is a preview of subscription content, access via your institution.


  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.


  • Arellano, M., and S. Bond. 1991. Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies 58(2): 277–297.

    Article  Google Scholar 

  • Cahill, B. 2007. Of note: Institutions, populism, and immigration in Europe. SAIS Review 27(1): 79–80.

    Article  Google Scholar 

  • Cameron, A.C., J.B. Gelbach, and D.L. Miller. 2008. Bootstrap-based improvements for inference with clustered errors. The Review of Economics and Statistics 90(3): 414–427.

    Article  Google Scholar 

  • Chinn, M.D., and H. Ito. 2006. What matters for financial development? Capital controls, institutions, and interactions. Journal of Development Economics 81(1): 163–192.

    Article  Google Scholar 

  • Chinn, M.D., and H. Ito. 2008. A new measure of financial openness. Journal of Comparative Policy Analysis: Research and Practice 10(3): 309–322.

    Article  Google Scholar 

  • Dalio, R., S. Kryger, J. Rogers, and G. Davis. 2017. Populism: The phenomenon. Technical Report 3/22/2017, Bridgewater Associates, LP.

  • Dornbusch, R., and S. Edwards. 1990. Macroeconomic populism. Journal of Development Economics 32(2): 247–277.

    Article  Google Scholar 

  • Dornbusch, R., and S. Edwards. 1991. Introduction to “The macroeconomics of populism in Latin America”. In The Macroeconomics of Populism in Latin America, ed. R. Dornbusch, and S. Edwards, 1–4. Chicago: University of Chicago Press.

    Chapter  Google Scholar 

  • Dovis, A., M. Golosov, and A. Shourideh. 2016. Political economy of sovereign debt: A theory of cycles of populism and austerity. Working Paper 21948, National Bureau of Economic Research.

  • Esarey, J., and A. Menger. 2018. Practical and effective approaches to dealing with clustered data. Political Science Research and Methods , 1–19.

  • Gidron, N., and P.A. Hall. 2017. The politics of social status: Economic and cultural roots of the populist right. The British Journal of Sociology 68: S57–S84.

    Google Scholar 

  • Greskovits, B. 1993. The use of compensation in economic adjustment programmes. Acta Oeconomica 45(1/2): 43–68.

    Google Scholar 

  • Hawkins, K.A. 2009. Is Chávez populist? Measuring populist discourse in comparative perspective. Comparative Political Studies 42(8): 1040–1067.

    Article  Google Scholar 

  • Heinö, A.J. 2016. Timbro Authoritarian Populism Index 2016. Stockholm: Timbro Institute.

    Google Scholar 

  • Hewison, K. 2005. Neo-liberalism and domestic capital: The political outcomes of the economic crisis in Thailand. The Journal of Development Studies 41(2): 310–330.

    Article  Google Scholar 

  • Ibragimov, R., and U.K. Müller. 2010. t-statistic based correlation and heterogeneity robust inference. Journal of Business & Economic Statistics 28(4): 453–468.

    Article  Google Scholar 

  • Jagers, J., and S. Walgrave. 2007. Populism as political communication style: An empirical study of political parties’ discourse in Belgium. European Journal of Political Research 46(3): 319–345.

    Article  Google Scholar 

  • Jones, E. 2007. Populism in Europe. SAIS Review 27(1): 37–47.

    Article  Google Scholar 

  • Kaufman, R .R., and B. Stallings. 1991. The political economy of Latin American populism. In The Macroeconomics of Populism in Latin America, ed. R. Dornbusch, and S. Edwards, 15–43. Chicago: University of Chicago Press.

    Google Scholar 

  • Leon, G. 2014. Strategic redistribution: The political economy of populism in Latin America. European Journal of Political Economy 34: 39–51.

    Article  Google Scholar 

  • Matsen, E., G.J. Natvik, and R. Torvik. 2016. Petro populism. Journal of Development Economics 118: 1–12.

    Article  Google Scholar 

  • Mazzuca, S.L. 2013. Lessons from Latin America: The rise of rentier populism. Journal of Democracy 24(2): 108–122.

    Article  Google Scholar 

  • Milanovic, B.L. 2014. All the Ginis, 1950–2012. Updated in Autumn 2014.

  • Moffitt, B. 2015. How to perform crisis: A model for understanding the key role of crisis in contemporary populism. Government and Opposition 50(2): 189–217.

    Article  Google Scholar 

  • Nohlen, D. 2005. Elections in the Americas: A Data Handbook: Volume 2. South America. Oxford: Oxford University Press.

    Google Scholar 

  • Ocampo, E. 2015. Commodity price booms and populist cycles. An explanation of Argentina’s decline in the 20th century. CEMA Working Papers: Serie Documentos de Trabajo. 562, Universidad del CEMA.

  • OECD. 2017. International migration database. Retrieved from

  • Roberts, K.M. 2007. Latin America’s populist revival. SAIS Review 27(1): 3–15.

    Article  Google Scholar 

  • Rode, M., and J. Revuelta. 2015. The wild bunch! An empirical note on populism and economic institutions. Economics of Governance 16(1): 73–96.

    Article  Google Scholar 

  • Rodrik, D. 2017. Populism and the economics of globalization. Working Paper 23559, National Bureau of Economic Research.

  • Rohac, D., S. Kumar, and A. Heinö. 2017. The wisdom of demagogues: Institutions, corruption and support for authoritarian populists. Economic Affairs 37(3): 382–396.

    Article  Google Scholar 

  • Sachs, J.D., and A.M. Warner. 1999. The big push, natural resource booms and growth. Journal of Development Economics 59(1): 43–76.

    Article  Google Scholar 

  • Tejapira, K. 2002. Post-crisis economic impasse and political recovery in Thailand: The resurgence of economic nationalism. Critical Asian Studies 34(3): 323–356.

    Article  Google Scholar 

  • United Nations. 2017a. Trends in international migrant stock: The 2017 revision. Downloaded Jan. 20, 2018.

  • United Nations. 2017b. World population prospects: The 2017 revision. Downloaded Aug. 6, 2017.

  • UNU-WIDER. 2017. World income inequality database (WIID3.4). Downloaded Sep. 13, 2017.

  • World Bank. 2017. World Development Indicators, 1960–2016. Downloaded Aug. 6: 2017.

Download references


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.

Author information

Authors and Affiliations


Corresponding author

Correspondence to Petar Stankov.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Stankov, P. The Political Economy of Populism: An Empirical Investigation. Comp Econ Stud 60, 230–253 (2018).

Download citation

  • Published:

  • Issue Date:

  • DOI:


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

JEL Classification

  • D72
  • P16
  • P48
  • P51
  • O57