The short‐term macroeconomic impact of populism: A case study of Poland

Abstract

Recent research shows that populist governments in general depress countries' economic growth and fail to improve income distribution. We study the short‐term macroeconomic consequences of populist policies implemented in Poland since 2015. Using the augmented synthetic control method, we find that the populists boosted the gross domestic product per capita by almost 8% between 2016 and 2019. We do not find any effect of populism on inflation and estimate only small labor market impacts. The populists improved tax revenue collection and reduced public debt. A generous child benefit program and other redistributive policies introduced by the populists significantly reduced overall poverty and almost eradicated absolute child poverty. Our results suggest that antiestablishment populists may have macroeconomic viability, at least in the short term.