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.