Exploring Economic Populism, a Neglected, but Growing, Phenomenon

36 Pages Posted: 14 Jan 2021 Last revised: 3 Nov 2021

See all articles by Beatrice Magistro

Beatrice Magistro

University of Toronto

Victor A. Menaldo

University of Washington - Department of Political Science; UW Political Economy Forum

Date Written: January 1, 2021

Abstract

The economic cost of populism is extremely high: after 15 years, GDP per capita is 10% lower compared to plausible non-populist counterfactuals. We seek to look under the hood and explain the mechanics behind these numbers: we provide a framework to make sense of this pattern and explain the systematic, mutually reinforcing association between populism and economic dysfunction and underperformance. Populists emanating from either the left or the right tend to converge on a similar political economic model: protectionism, crony capitalism, and inveterate rent seeking. We also adduce supporting evidence from very different places, Argentina, Chile, Greece, and Italy, and across disparate time periods. We argue that populism almost always ushers in economic collapse. We posit that a key reason for this is that, rather than seeing economic interactions as “win-win” situations, populists are obsessed with zero-sum thinking.


Keywords: Populism, economic crises, liberal democracy, welfare state capitalism, Latin America, Europe

Suggested Citation

Magistro, Beatrice and Menaldo, Victor A., Exploring Economic Populism, a Neglected, but Growing, Phenomenon (January 1, 2021). Available at SSRN: https://ssrn.com/abstract=3758349 or http://dx.doi.org/10.2139/ssrn.3758349

Beatrice Magistro

University of Toronto ( email )

Toronto, Ontario M5S 3G8
Canada

Victor A. Menaldo (Contact Author)

University of Washington - Department of Political Science ( email )

101 Gowen Hall
Box 353530
Seattle, WA 98195
United States

UW Political Economy Forum ( email )

Seattle, WA 98195
United States

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