Austerity, Economic Vulnerability, and Populism

• Department of Political and Social Sciences

In this seminar, EUI Visiting Fellow, Thomas Sattler (University of Geneva) will present the paper “Austerity, Economic Vulnerability, and Populism ", co-authored with Leonardo Baccini (McGill University).

Governments have repeatedly adjusted fiscal policy during the past decades. We examine the political effects of these adjustments in Western countries since the early 1990s using both district-level election outcomes and individual-level voting data. We expect that austerity increases populist votes, but only among economically vulnerable voters, who are hit most by austerity. Following the political economy literature, we identify economically vulnerable regions, looking at the share of low-skilled workers and share of manufacturing production. The results from a difference-in-differences analysis show that austerity increases support for populist parties in economically vulnerable regions, but austerity has little effect on voting in economically less vulnerable regions. These findings are confirmed by the analysis at the individual level. Our results suggest that the success of populist parties across Europe critically hinges on the government’s failure to protect the losers of structural economic change. The economic origins of populism, therefore, are not purely external, but the populist backlash is triggered by internal factors, notably public policies. 

The speaker will be presenting in person. Participants can follow the talk from Seminar room 2, although space is restricted to a maximum of 8 people on a first-come, first-served basis. The talk will also be live streamed and participants will receive the zoom link once registered.