DP15405 Populist Leaders and the Economy
|Author(s):||Manuel Funke, Moritz Schularick, Christoph Trebesch|
|Publication Date:||October 2020|
|Keyword(s):||institutions, populism, protectionism|
|JEL(s):||E60, N10, P16|
|Programme Areas:||Public Economics, International Trade and Regional Economics, Economic History, International Macroeconomics and Finance, Monetary Economics and Fluctuations, Macroeconomics and Growth|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=15405|
Populism at the country level is at an all-time high, with more than 25% of nations currently governed by populists. How do economies perform under populist leaders? We build a new cross-country database identifying 50 populist presidents and prime ministers 1900-2018. We find that the economic cost of populism is high. After 15 years, GDP per capita is more than 10% lower compared to a plausible non-populist counterfactual. Rising economic nationalism and protectionism, unsustainable macroeconomic policies, and institutional decay under populist rule do lasting damage to the economy.