DP7723 Economic growth and the rise of political extremism: theory and evidence

Author(s): Markus Brückner, Hans Peter Grüner
Publication Date: March 2010
Keyword(s): Economic Growth, Political Regimes
JEL(s): O40, O52
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7723

In many western democracies, political parties with extreme platforms challenge more moderate incumbents. This paper analyses the impact of economic growth on the support for extreme political platforms. We provide a theoretical argument in favor of growth effects (as opposed to level effects) on the support for extremist parties and we empirically investigate the relationship between growth and extremist votes. A lower growth rate increases the support for extreme political platforms but our estimates also indicate that extreme platforms are unlikely to gain majorities in OECD countries, unless there is an extreme drop in the GDP per capita growth rate.