Antonio Spilimbergo, 13 July 2021

Many analysts expected Covid-19 to expose the contradictions of ‘populist’ politicians and cited various reasons for this, including short-sightedness, the lack of trust often associated with populist sentiments, unhelpful populist narratives, and a resistance to international cooperation. This column argues that there is no clear evidence that its handling of the pandemic has ‘killed’ populism. In fact, the pandemic crisis has spawned new political issues which, if left unaddressed by traditional parties, may rekindle the growth of the populist ideology once again. 

Thomas Lambert, Enrico Perotti, Magdalena Rola-Janicka, 06 July 2021

Political considerations have become important in finance research, with significant implications for policymaking. This column summarises new research presented at the CEPR conference on the Political Economy of Finance, including work on opaque investments in political influence, electoral impact of credit and regulation, the role of institutional complexity in shaping reforms and incentives of central bankers. The conference kickstarted the PolEconFin initiative aimed at providing a meeting point for researchers in this topical area.

Antonio Spilimbergo, 11 June 2021

Latin America has a long history of populist government. New research by Antonio Spilimbergo quantifies the consequences of populism for the region's institutions and economies. 

Luca Bellodi, Massimo Morelli, Matia Vannoni, 07 April 2021

Populism is once more becoming a dominant feature of the political landscape in many countries, but little is known about its consequences for the quality of government. Using Italian municipal-level data, this column shows that populism has a negative impact on bureaucratic expertise and government performance, ultimately to the detriment of society and the economy. 

Bruno Caprettini, Lorenzo Casaburi, Miriam Venturini, 01 April 2021

In the aftermath of World War II, the 1950 Italian land reform expropriated wealthy landowners and redistributed their land among rural workers, with substantial and long-lasting electoral rewards for the initiating Christian Democratic Party. The electoral effects of the reform were visible even 40 years later, arguably because the reform strengthened local Christian Democratic grassroots organisations and because Christian Democratic governments continued to invest in reform towns. The episode offers insights into the persistence of the electoral benefits of redistribution.

Manuel Funke, Moritz Schularick, Christoph Trebesch, 16 February 2021

The rise of populism in the past two decades has motivated much work on its drivers, but less is known about its economic and political consequences. This column uses a comprehensive cross-country database on populism dating back to 1900 to offer a historical, long-run perspective. It shows that (1) populism has a long history and is serial in nature – if countries have been governed by a populist once, they are much more likely to see another populist coming to office in the future; (2) populist leadership is economically costly, with a notable long-run decline in consumption and output; and (3) populism is politically disruptive, fostering instability and institutional decay. The analysis suggests that populism is here to stay.

James Snyder, Hasin Yousaf, 28 November 2020

Holding large rallies is an especially important campaign activity for many populist leaders, including for Donald Trump during the 2016 US presidential race. This column studies the effect of campaign rallies held by Democratic and Republican US presidential candidates since 2008, including Donald Trump. It explores the effect of rallies on citizens’ preferences over candidates, policy issues, and their intention to vote. Populist leaders may be particularly effective in gaining support via their campaign rallies, at least temporarily. Populist leaders’ success may depend on connecting with voters via rallies.

Daron Acemoğlu, Giuseppe De Feo, Giacomo De Luca, Gianluca Russo, 28 October 2020

Right-wing populist movements often come to power by exploiting people’s anxieties and fears. Following WWI, fascists in Italy likely exploited the perceived threat of socialism to gain support among the elite and the middle classes. This column explores the link between the threat of socialism and Mussolini’s rise to power and finds a strong association between the Red Scare in Italy and the subsequent local support for the Fascist Party in the early 1920s. Local elites, especially large landowners, played an important role in boosting Fascist Party activity and support.

Alex Imas, Kristóf Madarász, 22 August 2020

Protectionism, nationalism, left- and right-wing populism are on the rise all over the world. This column tests the premise that the value a person attaches to consuming an object or possessing an attribute increases in others' unmet excess desire for it, terming this behaviour as mimetic dominance seeking. On the basis of two experiments designed to provide direct evidence of this behaviour, it finds that mimetic dominance leads to a reluctance to trade and a direct preference for objects that become scarcer, with the latter generating a motive for exclusion.

Jean Lacroix, Pierre-Guillaume Méon, Kim Oosterlinck, 18 July 2020

Rising populism has raised concerns that democracies may give in to authoritarian pressure. On 10 July 1940, exactly 80 years ago, the French parliament passed an enabling act granting full power to Marshal Philippe Pétain. Analysing how the Members of Parliament voted, this column shows that MPs belonging to a pro-democratic dynasty were more likely to oppose the act. Dynastic politicians may contribute to stabilising democracies by better resisting peer pressure.

Thorsten Beck, Orkun Saka, Paolo Volpin, 10 July 2020

A rapidly expanding literature has shown the importance of political economy factors for legislative and regulatory actions in the financial sector and ultimately financial sector stability and efficiency. This column reports on recent research in this field, presented at the first London Political Finance, including work on financial fragility leading to the rise of right-wing extremist parties, private interests in financial regulation, financial gains from political connections, political beliefs and financial decisions and the role of media in financial decisions.  It lays out some of the important takeaways and suggests directions for further research that can shed light on the remaining issues.

Christian Kroll, 09 June 2020

Concerns are growing that the COVID-19 crisis could be exploited by populists claiming to be the voice of those who have been ‘left behind’. This column presents a new framework which could help shed light on the relationship between sustainable development and populism. Progress on the Sustainable Development Goals may be associated with diminishing electoral support for populism, but humanity must still get better at turning the trade-offs between SDGs into synergies. During the COVID-19 recovery, an effective way to prevent populists from exploiting the crisis may involve making the SDGs the policy blueprint. 

Emeric Henry, Ekaterina Zhuravskaya, Sergei Guriev, 21 May 2020

The most recent manifestations of populism owe a portion of their rise to social media and the unfettered spread of false and misleading narratives or, as they are sometimes called, ‘alternative facts’. This column makes use of an online experiment conducted among Facebook users in France during the 2019 European Parliament elections to show that fact-checking can staunch the flow of false information, as can the imposition of small costs such as requiring an additional click to confirm a user’s willingness to share news.

André Blais, Damien Bol, Marco Giani, Peter John Loewen, 07 May 2020

Major crises can act as catalysts – either destabilising or strengthening the political regimes that oversee them, depending on how citizens view their government’s performance. This column analyses a cross-country survey in Western Europe during March and April, a period that saw many of these governments enforce lockdowns in response to COVID-19. It finds a rally effect: individuals who took the survey immediately after lockdowns showed more support for incumbents and for democratic institutions than those who took it before.

Gianmarco Daniele, Amedeo Piolatto, Willem Sas, 07 May 2020

Polarisation, populism, and extremism are on the rise on both sides of the Atlantic. This column focuses on the role of policies in multi-level federations (such as the EU) in partially explaining the rise of extreme political parties. An analysis of differences in vote shares between European and national parliamentary elections suggests that support for extreme politicians is highest in countries with the largest gains and losses from federal policies. Eurosceptic parties, which are very protective of national interests, win higher shares of the EU vote in core and periphery countries, whilst the opposite is true for countries in the middle.

Massimo Morelli, 08 May 2020

Political participation is an important, and often neglected, channel through which economic insecurity, reductions in trust, and changes in cultural attitudes all affect populism. This column argues both the demand for and supply of populism depend on mobilisation, and that populism can be seen as a mobilisation campaign strategy. While this framework explains the recent surge of populism, it also provides reasons to believe that the populism wave could be temporary. The column also discusses possible consequences of the Covid-19 crisis for populists in and out of power.

Sergei Guriev, 22 April 2020

Although nationalists often talk about bringing industry home, the modern economy is based more around the idea of global value chains.  The European value chain model works well for participating countries and in the current crisis  even seemingly largely self-sufficient countries such as the United States are found to be reliant on external sources for some medical and other supplies.
Sergei Guriev is speaking at the CEPR / PIIE webinar: Containing the economic nationalist virus through global coordination, held 15 April 2020.

Monica de Bolle, 22 May 2020

Monica de Bolle, PIIE, is hopeful that, while nationalist leaders may be benefiting from a surge of popularity during the current crisis, moving forward in a post-pandemic world, they are likely to be held to account for poor policy decisions by the electorate. Taken from the CEPR / PIIE Webinar 'Containing the economic nationalist virus through global coordination', held 15 April 2020

Pierluigi Balduzzi, Emanuele Brancati, Marco Brianti, Fabio Schiantarelli, 20 February 2020

The effects of shocks to political risk can be captured by the change in the spread of sovereign credit default swaps. This column shows how the rise of populist movements in Italy following the financial crisis and sovereign debt crisis affects domestic and euro area financial markets, and also impacts the Italian real economy. Italy has been an ideal laboratory to explore and learn about the economic consequences of political risk shocks, and the instability there implies that this is likely to continue to be the case in the future.

Kai Gehring, Stephan A. Schneider, 18 February 2020

Secessionist parties draw upon rhetoric on cultural identity and political autonomy to garner votes. However, the parties’ electoral success is also influenced by the availability of regional resources. This column examines two secessionist parties in the UK – the Scottish National Party and the Welsh Plaid Cymru – and the divergence in their performance following the discovery of oil within Scotland’s hypothetical maritime borders. It finds that a 10% increase in relative regional wealth is associated with an increase of 3 percentage points in the vote share of secessionist parties. Relative regional resource wealth is more important than absolute wealth, and changes in regional resource wealth only play a role when there is baseline support for secession.

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