DP15971 Establishment and Outsiders : Can Political Incorrectness and Social Extremism work as a Signal of Commitment to Populist Policies?

Author(s): Jerome Gonnot, Paul Seabright
Publication Date: March 2021
Date Revised: March 2021
Keyword(s): median voter model, populism
JEL(s): D72, D78, D81
Programme Areas: Public Economics, Organizational Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15971

This paper explores why voters might vote for candidates who espouse extreme policies that voters do not support or behave in ways that they do not approve. We develop a model in which these policies and behaviors serve as signals that the candidates are outsiders to the political establishment, and therefore more likely than Establishment candidates to implement economic policies that are congruent with voters' interests. Establishment candidates seeking election may therefore choose an extreme social platform or indulge in offensive behavior for \textit{populist} reasons - that is, as a way of signaling independence from the interests of the Establishment. This populist strategy is more likely when the value of social policies as signals of future economic policy outweighs their value as signals of future social policies, when voters' trust in economic and social policy announcements is low, when the cost for candidates of breaking campaign promises once elected is low, and when there exist few alternative ways for the voters to predict future policies. We present empirical support from the US and Europe for the main prediction of the model that liberal voters are more likely to vote for social outsiders when they have lower levels of trust in politicians.