Rise of populism and economic natonalism

Those who think financial crisis are just about decline of markets and their resolution are mistaken. It has wider implications for society as we are seeing across the world. There is rise of populism and economic nationalism in major parts of the world.

Voxeu.org has dedicated a webpage for articles on the topic. Sergei Guriev introduces the debate and sums up views of three experts who have written on the forum.

Latest edition of Journal of Economic Perspectives has a symposium and 4 articles on the topic:

Symposium on Modern Populism
“On Latin American Populism, and Its Echoes around the World,” by Sebastian Edwards
In this article, I discuss the ways in which populist experiments have evolved historically. Populists are charismatic leaders who use a fiery rhetoric to pitch the interests of “the people” against those of banks, large firms, multinational companies, the International Monetary Fund, and immigrants. Populists implement redistributive policies that violate the basic laws of economics, and in particular budget constraints. Most populist experiments go through five distinct phases that span from euphoria to collapse. Historically, the vast majority of populist episodes end up badly; incomes of the poor and middle class tend to be lower than when the experiment was launched. I argue that many of the characteristics of traditional Latin American populism are present in more recent manifestations from around the globe.
Full-Text Access | Supplementary Materials

“Informational Autocrats,” by Sergei Guriev and Daniel Treisman

In recent decades, dictatorships based on mass repression have largely given way to a new model based on the manipulation of information. Instead of terrorizing citizens into submission, “informational autocrats” artificially boost their popularity by convincing the public they are competent. To do so, they use propaganda and silence informed members of the elite by co-optation or censorship. Using several sources, including a newly created dataset on authoritarian control techniques, we document a range of trends in recent autocracies consistent with this new model: a decline in violence, efforts to conceal state repression, rejection of official ideologies, imitation of democracy, a perceptions gap between the masses and the elite, and the adoption by leaders of a rhetoric of performance rather than one aimed at inspiring fear.
Full-Text Access | Supplementary Materials

“The Surge of Economic Nationalism in Western Europe,” by Italo Colantone and Piero Stanig

We document the surge of economic nationalist and radical-right parties in western Europe between the early 1990s and 2016. We discuss how economic shocks contribute to explaining this political shift, looking in turn at theory and evidence on the political effects of globalization, technological change, the financial and sovereign debt crises of 2008–2009 and 2011–2013, and immigration. The main message that emerges is that failures in addressing the distributional consequences of economic shocks are a key factor behind the success of nationalist and radical-right parties. We discuss how the economic explanations compete with and complement the “cultural backlash” view. We reflect on possible future political developments, which depend on the evolving intensities of economic shocks, on the strength and persistence of adjustment costs, and on changes on the supply side of politics.
Full-Text Access | Supplementary Materials

“Economic Insecurity and the Causes of Populism, Reconsidered,” Yotam Margalit

Growing conventional wisdom holds that a chief driver of the populist vote is economic insecurity. I contend that this view overstates the role of economic insecurity as an explanation in several ways. First, it conflates the significance of economic insecurity in influencing the election outcome on the margin with its significance in explaining the overall populist vote. Empirical findings indicate that the share of populist support explained by economic insecurity is modest. Second, recent evidence indicates that voters’ concern with immigration—a key issue for many populist parties—is only marginally shaped by its real or perceived repercussions on their economic standing. Third, economics-centric accounts of populism treat voters’ cultural concerns as largely a by-product of experiencing adverse economic change. This approach underplays the reverse process, whereby disaffection from social and cultural change drives both economic discontent and support for populism.
Full-Text Access | Supplementary Materials
Lots to read and figure…

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