Austerity, Economic Vulnerability, and Populism

Where: Zoom Platform
Time: 3.30 p.m.

Please contact school.socialsciences [at] unitn.it

for the link to the Zoom event.

Speaker

• Leonardo Baccini, McGill University

Abstract

Governments have repeatedly adjusted fiscal policy during the past decades. We exam-ine the political effects of these adjustments in Western countries since the early 1990susing both district-level election outcomes and individual-level voting data. We expectthat austerity increases populist votes, but only among economically vulnerable voters,who are hit most by austerity. Following the political economy literature, we identifyeconomically vulnerable regions, looking at the share of low-skilled workers and shareof manufacturing production. The results from a difference-in-differences analysis showthat austerity increases support for populist parties in economically vulnerable regions,but austerity has little effect on voting in economically less vulnerable regions. Thesefindings are confirmed by the analysis at the individual level. Our results suggestthat the success of populist parties across Europe critically hinges on the governmentsfailure to protect the losers of structural economic change. The economic origins ofpopulism, therefore, are not purely external, but the populist backlash is triggered byinternal factors, notably public policies.Keywords: fiscal policy, globalization, automation, political backlash, elections, West-ern Europe.Word count: 9,462. The paper is co-authored with Thomas Sattler, University of Geneva.

Discussants

• Andrea Fracasso - University of Trento

• Mario Diani - University of Trento