The Political Economy of Populism

Abstract

We synthesize the literature on the recent rise of populism. First, we discuss definitions and present descriptive evidence on the recent increase in support for populists. Second, we cover the historical evolution of populist regimes since the late nineteenth century. Third, we discuss the role of secular economic factors related to cross-border trade and automation. Fourth, we review studies on the role of the 2008–09 global financial crisis and subsequent austerity, connect them to historical work covering the Great Depression, and discuss likely mechanisms. Fifth, we discuss studies on identity politics, trust, and cultural backlash. Sixth, we discuss economic and cultural consequences of growth in immigration and the recent refugee crisis. We also discuss the gap between perceptions and reality regarding immigration. Seventh, we review studies on the impact of the internet and social media. Eighth, we discuss the literature on the implications of populism’s recent rise. We conclude outlining avenues for further research. (JEL D72, E32, G01, J15, N30, N40, Z13)

Economic, social and political fragmentation: Linking knowledge-biased growth, identity, populism and protectionism

“…Figure 2 summarises Proposition 2. In other words, knowledge-biased growth leads more people to adopt the extreme moral and ideological positions and thereby leads to a hollowing out of the tolerant 40 It can be shown that our assumptions are sufficient for a C < a I . middle ground.…”

Mobile Internet and the Rise of Political Tribalism in Europe

“…Second, our work relates to the burgeoning literature in economics and political science on economic and cultural determinants of the rise in populist vote reviewed by Guriev and Papaioannou (2020). Key economic drivers range from austerity measures (Fetzer, 2019), technological change (Anelli et al, 2021), exposure to international competition (Colantone and Stanig, 2018;Autor et al, 2020), immigration (Dustmann et al, 2019;Halla et al, 2017), globalization (Rodrik, 2018), unemployment and economic grievances (Algan et al, 2017;Dustmann et al, 2017) and associated economic insecurity (Guiso et al, 2020).…”

Second-generation immigrants and native attitudes toward immigrants in Europe

“…The rise in international migration over the past years, and more particularly the large influx of refugees to the European Union in 2015-2017, has motivated several studies to explore the relationship between immigration and the rise of extreme-right political parties in Europe (Guriev and Papaioannou, 2022). But whether and how immigration affects the political arena depend largely on attitudes and beliefs of majority populations toward immigrants.…”