A Political Theory of Populism

63 Pages Posted: 16 Aug 2011 Last revised: 18 Aug 2011

See all articles by Daron Acemoglu

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Georgy Egorov

Northwestern University - Kellogg School of Management; NBER

Konstantin Sonin

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies; Higher School of Economics; Centre for Economic Policy Research (CEPR)

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Abstract

When voters fear that politicians may have a right-wing bias or that they may be influenced or corrupted by the rich elite, signals of true left-wing conviction are valuable. As a consequence, even a moderate politician seeking reelection chooses ‘populist’ policies – i.e., policies to the left of the median voter – as a way of signaling that he is not from the right. Truly right-wing politicians respond by choosing more moderate, or even left-of-center policies. This populist bias of policy is greater when the value of remaining in office is higher for the politician; when there is greater polarization between the policy preferences of the median voter and right-wing politicians; when politicians are indeed more likely to have a hidden right-wing agenda; when there is an intermediate amount of noise in the information that voters receive; when politicians are more forward-looking; and when there is greater uncertainty about the type of the incumbent. We show that similar results apply when some politicians can be corrupted or influenced through other non-electoral means by the rich elite. We also show that ‘soft term limits’ may exacerbate, rather than reduce, the populist bias of policies.

Keywords: political economy, inequality, populism, voting, signaling

JEL Classification: D71, D74, C71

Suggested Citation

Acemoglu, Daron and Egorov, Georgy and Sonin, Konstantin, A Political Theory of Populism. MIT Department of Economics Working Paper No. 11-21. Available at SSRN: https://ssrn.com/abstract=1910241 or http://dx.doi.org/10.2139/ssrn.1910241

Daron Acemoglu (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Georgy Egorov

Northwestern University - Kellogg School of Management ( email )

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Konstantin Sonin

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies ( email )

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Higher School of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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