Populist Leaders and the Economy

203 Pages Posted: 3 Nov 2020 Last revised: 23 Jun 2022

See all articles by Manuel Funke

Manuel Funke

Free University of Berlin (FUB)

Moritz Schularick

University of Bonn - Department of Economics; Centre for Economic Policy Research (CEPR)

Christoph Trebesch

Kiel Institute for the World Economy; Centre for Economic Policy Research (CEPR)

Date Written: October 2020

Abstract

Populism at the country level is at an all-time high, with more than 25% of nations currently governed by populists. How do economies perform under populist leaders? We build a new long-run cross-country database to study the macroeconomic history of populism. We identify 51 populist presidents and prime ministers from 1900 to 2020 and show that the economic cost of populism is high. After 15 years, GDP per capita is 10% lower compared to a plausible non-populist counterfactual. Economic disintegration, decreasing macroeconomic stability, and the erosion of institutions typically go hand in hand with populist rule.

Keywords: institutions, populism, protectionism

JEL Classification: E60, N10, P16

Suggested Citation

Funke, Manuel and Schularick, Moritz and Trebesch, Christoph, Populist Leaders and the Economy (October 2020). CEPR Discussion Paper No. DP15405, Available at SSRN: https://ssrn.com/abstract=3723597

Manuel Funke (Contact Author)

Free University of Berlin (FUB) ( email )

Van't-Hoff-Str. 8
Berlin, Berlin 14195
Germany

Moritz Schularick

University of Bonn - Department of Economics ( email )

Bonn
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Christoph Trebesch

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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