This column is a lead commentary in the VoxEU debate on "Populism"
Accepting the definition of a ‘populist’ party as being anti-elite and pro-people (commonly used in political science and also accepted in most other articles in the VoxEU debate), Guiso et al. (2017, 2020) show that economic insecurity has direct and significant effects on the propensity to vote for a populist party (when available) and depresses turnout. These two effects should be studied together because many of the drivers of turnout are also drivers of the decision to vote for a populist party.
Low trust in political parties and institutions, and a worsening of attitudes towards immigrants, are important direct causes of populist voting, and are themselves determined by economic insecurity shocks.1 In particular, the Italian case suggests that a perceived deterioration of the national economy has a greater impact on the reduction of trust in traditional parties with respect to an individual sense of economic insecurity changes.2 In contrast, the opposite ranking applies (greater impact of individual changes) when looking at the effects of changes in economic insecurity perceptions on attitudes towards immigrants. Most importantly, Guiso et al. (2020) quantify the turnout depression effects of economic insecurity as explaining almost 40% of the total effect of economic insecurity on the vote share of populist parties.
Aside from the average direct (and indirect) effects of economic insecurity on political participation and populist voting, it is important to emphasise that such mobilisation effects may be heterogeneous. They may well be related to an opposition campaign. An outsider may be more credible when using anti-elite and anti-corruption rhetoric and can therefore more effectively mobilise the disillusioned voters (Barr 2009). The voters who are more attached to specific party ideologies (core or partisan voters) may be mobilised if the electoral campaign of the candidates on the opposite side become more populist in their rhetoric and policy proposals (Hall and Thompson 2018).
In two recent working papers (Morelli et al. 2020, Gennaro et al. 2020), we exploit these considerations on heterogeneity to generate predictions about when a strategic candidate may want to rationally choose to supply a populist electoral campaign, combining anti-elite rhetoric and simplistic policy statements. In Morelli et al. (2020), we show that low trust in the political class increases the supply of politicians with simplistic policy proposals, reduces the turnout of educated citizens, and increases the turnout of less educated citizens. Our text analysis of the 2016 and 2018 American elections in Gennaro et al. (2020) implies that the outsiders who are most likely to use (and most frequently have used) a populist campaign are those who campaign in districts impacted by high economic insecurity (which created more disillusioned voters), and where the elections were expected to be close run. Since anti-elite rhetoric is almost always combined with simplistic commitments on policies (aimed to reduce the executive constraints and supranational constraints), the intuition is that tying one's hands with this type of position makes sense strategically only when the immediate impact on the probability of election victory (given the mobilisation effects of the disillusioned citizens) is sufficiently large, with respect to the costs of being associated with such positions without reaching office.
From opposition to power
When a (strategic) populist wins an election, (s)he has to deliver on at least on some of the campaign promises. Sometimes the simplistic policy promises are difficult to maintain, so there is a hope that the electoral fortunes can rapidly change (see Levy et al. 2019 for a rationalisation of potential cycles). However, since most of the simplistic protection commitments involve protectionism and the elimination of checks and balances, the populists' tenure must be expected to have serious consequences both for domestic policy-making and for international relations.
Sasso and Morelli (2020) show that having populists in office has dramatic consequences for the quality (selection) and incentives (moral hazard) of bureaucrats. Mattozzi et al. (2020) show that the protectionism policies and strategic disengagement policies that characterise populist foreign policy are particularly dangerous when the populist is in charge of a superpower, simultaneously causing an increase of conflict risk and a rise in inequality within countries that are ethnically divided. If one adds the common considerations that populists typically do not possess much competence and experience, one can only hope that the part of the cycle with populists in office is as short as possible. It remains to be seen as to whether the recent rise of populism is just a short parenthesis of history.
The potential consequences of Covid-19 crisis
Economic insecurity could reach a high peak due to the pandemic, at both individual and aggregate level. As a result, it is natural to ask the question whether we should expect an additional rise of populism throughout Europe. In principle, a potential effect of a huge crisis like Covid-19 could be further disillusionment, further nationalism and protectionism, and increased cultural polarisation – all of which produce fertile ground for populism. However, the same mobilisation considerations (put forward in the line of the research described above) offers a another viewpoint for the prediction of what may happen next. Disillusionment and resentment are used strategically by populists especially when they are in opposition. If the crisis heats during their tenure in office the effect could be a reversal. What could be the factors that could determine a backlash against populists due to the Covid-19 crisis?
The first (minor) consideration is that the blame is often going to be directed towards incumbents. If populist politicians are presently in office they may get part of the blame. A second consideration is that European leaders and citizens are realising that there is a need for supranational help, and that nationalism and isolationism could have disastrous economic consequences beyond the pandemic itself. This is more difficult to ignore than in the past. Third, the social identification process described by Besley and Persson (2019) or Gennaioli and Tabellini (2019) could be stopped when the main problem is a global pandemic (that touches all groups equally). Fourth, the role of competence may increase at a time when the pandemic raises the stakes. Fifth, and perhaps most importantly, as emphasised in Levy et al. (2020), Morelli et al. (2020), and Gennaro et al. (2020), the key to the success of populists is the greater mobilisation of disillusioned voters in relation to the turnout of core voters. At a time of competence-related fears, the turnout of populist supporters may be low, and the mobilisation of people worried about the future is likely to be quite high.
An important factor (that may go in the opposite direction) is a virus-induced consolidation of power, driven by the ‘rally-around-the-flag’ effect. In November 2019 there were a large number of active protest movements around the world (28 according to Freedom House). Today there are none. Protest movements that would have been gathering momentum (and would have justified immediate intervention) are directly discouraged by personal contagion fears. This effect is furthered by the reduction in the belief that others would show up (collective action problem exacerbated), and a greater tolerance of personal tracking and monitoring. This weakening of standard forms of opposition and protest consolidates power, no matter whether the government is populist or not. While this concern about the suspended salience of minority rights, human rights, and freedom does not relate per se to the future of populism in electoral politics, it benefits populists in power for a simple reason. Populists’ positions in power are threatened when the unity of the people is replaced by majority-minority confrontations, and by riding on social distancing policies, these divisions of the ‘people’ can be diffused. These are important concerns, but I believe that in democracies the relative political participation effects I highlighted above will prevail.
Algan, Y, S Guriev, E Papaioannou and E Passari (2017), “The European Trust Crisis and the Rise of Populism", Brookings Papers on Economic Activity, Fall.
Ananyev, M and S Guriev (2018), “Effect of Income on Trust: Evidence from the 2009 Economic Crisis in Russia", The Economic Journal 129 (619): 1082-1118.
Barr, R R (2009), “Populists, Outsiders and Anti-Establishment Politics", Party Politics 15(1): 29-48.
Besley, T and T Persson (2019), “The Rise of Identity Politic", unpublished manuscript.
Bordignon, M and T Colussi (2020), “Dancing with the Populist. New Parties, Electoral Rules and Italian Municipal Elections", unpublished manuscript.
Frieden, J and S Walter (2017), “Understanding the Political Economy of the Eurozone Crisis", Annual Review of Political Science 20(1): 371-390.
Gennaioli, N and G Tabellini (2019), “Identity, Beliefs, and Political Conflict", unpublished manuscript.
Gennaro, G, G Lecce and M Morelli (2020), “Mobilization and the Strategy of Populism: Theory and Evidence from US Elections", massimomorelli.eu.
Guiso, L, H Herrera, M Morelli and T Sonno (2017), “Demand and supply of populism", CEPR DP 11871.
Guiso, L, H Herrera, M Morelli and T Sonno (2020), “Economic Insecurity and the Demand of Populism in Europe", massimomorelli.eu.
Guiso, L, H Herrera, M Morelli and T Sonno (2019), “Global Crises and Populism: the Role of Eurozone Institutions", Economic Policy 34(97): 95-139.
Guriev, S and E Papaioannou (2020), “The Political Economy of Populism", CEPR DP14433.
Hall, A B and D M Thompson (2018), “Who Punishes Extremist Nominees? Candidate Ideology and Turning Out the Base in US Elections", American Political Science Review 112(3): 509-524.
Hernandez, E A and H Kriesi (2016), “The electoral consequences of the financial and economic crisis in Europe", European Journal of Political Research 55(2): 203-24.
Levy, G, R Razin and A Young (2019), “Mispecified Politics and the Recurrence of Populism." unpublished manuscript.
Mattozzi, A, M Morelli and M Yamada Nakaguma (2020), “Populism and War", CEPR DP 14501.
Morelli, M, A Nicolo and P Roberti (2020), “Populism as Simplistic Commitment", massimonmorelli.eu (forthcoming)
Sasso, G and M Morelli (2020), “Bureaucrats under Populism", CEPR DP 14499.
1 Strong evidence of significant effects of income shocks on trust can also be found in Ananyev and Guriev (2018) and Algan et al (2017). See also the recent survey of Guriev and Papaioannou (2020) and for Italy Bordignon and Colussi (2020).
2 This is consistent with previous evidence that macro-economic shocks generate mistrust in the political system (see e.g. Hernandez and Kriesi (2016), Frieden and Walter (2017), and Guiso et al (2019)).