Long-term causes of populism
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Long-term causes of populism Gian Italo Bischi1 · Federico Favaretto2 · Edgar J. Sanchez Carrera1,3 Received: 5 April 2020 / Accepted: 3 September 2020 © The Author(s) 2020
Abstract Why is populism emerging now in Europe? Why is it present in USA and Latin America? What model of political choice may explain these facts? Our paper addresses these questions by building an evolutionary game with two groups of players that decide whether to support a populist party by weighting demand for redistribution and demand for tough policy against immigration. Fundamentally, it is assumed that agents care about immigration the more they fear it and the higher number of other people care about it. Overall, positive shifts in the fear of immigration and increases in inequality drive citizens to converge toward supporting populists. The stability of the equilibria depends on the crucial parameters of the model, namely: fear of immigrants, the effect that the population type (the number of citizens supporting populism) have on individual preferences, economic inequality. Different equilibria represent different cases of populism: South-American left-wing populism and European right-wing populism. We propose that an economic society with a low inequality of wealth and with a low fear of immigrants is needed to avoid populism. Keywords Behavioral economics · Economic and political behavior · Political party · Populism · Population games · Wealth inequality JEL Classification C72 · C73 · D31 · D72 · E60 · H30
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Edgar J. Sanchez Carrera [email protected] Gian Italo Bischi [email protected] Federico Favaretto [email protected]
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Department of Economics, Society, Politics, The University of Urbino Carlo Bo, Urbino, Italy
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Economics Department, Morrissey College of Arts and Sciences, Boston College, Boston, USA
3
Research Fellow at CIMA UAdeC, Saltillo, Mexico
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1 Introduction Populism consists in political movements that share a demand for short-term protection, such as from immigrants and economic hardship, and it is characterized by three main properties (Guiso et al. 2017): (i) the claim that it protects the people from the elite, (ii) the focus on demand-driven policymaking, and (iii) the disregard for future consequences of their policies. Lately, populism has fostered new enthusiasm and diverse research contributions, spurring from the emergence of parties and political movements labeled both as left-wing (South American populism described by Dornbusch and Edwards 1991; Acemoglu et al. 2013) and right-wing (mostly European and in USA). In current times, populism is sweeping Europe’s political equilibria. A report published by the Guardian in November 2018, (by a group of leading political scientists) found that one in four European voting citizens will be casting their vote for a populist. In addition, we know that there were nine European countries where populists participated in government, for a total of 170 million people in 2018: In 1998, the countries were 2 for a total of 1
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