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Until recent times, populism was something fairly alien to the average “Western” consumer-voter. It had the ethereal flavor of an elementary textbook definition — and when discussed more concretely it mostly brought to mind distant Latin American inflationary disasters and democratic failures (e.g., Argentina, Brazil, Venezuela).

However, populism is now closer to home. It is part of government coalitions in Italy, divides the European Union through anti-system movements, such as Brexit, and generally seems to be increasingly popular throughout all “our” Western democracies, including the United States.

But what does populism stand for normatively? What is the populist “taste” for a good society?

Populism is prescriptively a composition of interventionist ideologies. It favors government intervention along all policy dimensions, namely in economic (social-democracy in the European sense, liberalism in the US sense), personal (conservatism), and social (communism, Nazism) spheres. Though there can be different degrees of intervention in each sphere according to time, place, and political expediency and platform, the bottom line is that by nature, populists claim to promote the interests of consumer-voters — conceived as a monolithic body rather than as individuals and groups of individuals that will act in their own best interest — against the elites.[1]

This composite and highly interventionist ideology raises a more fundamental question. If populism does not believe in people's ability to do what is best for them, then why do those same people support it? In other words, what makes populism so popular?

This article considers this question mostly in terms of the economic determinants of populist ideology by focusing on the West, Europe, and Italy. Our stick-figure answer is that there is not yet a mono-causal explanation for populism as an ideology, but rather four ideological “regularities.” The lack of a clear-cut, original ideology is an important component of populism's vast popularity.

 

Populism in the West

The literature still debates about the principal cause at the root of populism's ascent in the West. Is it economic factors, such as the global financial crisis and Euro skepticism? Or is it attributable to a sort of profound change in cultural and social values, experienced over the last fifty years or so, that weakened the belief in democratic governance?[2]

On the economic front, the rise of populism is explained by the difficulties that traditional parties across the political spectrum experience in addressing the systemic weakening of economic security.[3] Here, one finds support especially among those who have lost their job, who generally suffer from socio-economic difficulties, and are among the lower skilled labor force, which makes them more exposed to globalization and problems arising from immigration. The Mexico-US wall is an example that quickly comes to mind.

Another branch of the literature explains the emergence of populism as a loss of trust in representative democracy.[4] There seems to be a perception that democratic procedures and institutions are slow to react to people's needs. The more general belief appears to be that democracy as we know it has become an unfit mechanism for political governance in times of more rapid technological change and global challenges. This situation is worsened by the real time, bottom-up, information-spreading power of social media. For social media contributes to rendering information about political capture and corruption more widely known.

The economic and loss of trust branches converge in Rodrik’s “Populism and the economics of globalization.”[5] The empirical literature shows that recently (perhaps not so recently if one broadens the horizon to include Latin America) electoral participation has been strongly affected by both socio-economic factors and cultural transformations that arise from globalization. The economic insecurity deriving from the medium-term impact of globalization and technological progress (e.g., automation, increased competition from low-wage countries and low-environmental standards, outsourcing) along with the severe increase in unemployment in the West, coexist with the cultural backlash against cosmopolitanism, multiculturalism, the shift towards national identity, and the return to national sovereignty.

If populism does not believe in people's ability to do what is best for them, then why do those same people support it?

Populism in Europe

Similarly, the main reasons behind the success of populism in Europe are apparently consumer-voters' changing social and economic needs and the somewhat related erosion of political representation. This, coupled with the drop in trust in policymakers and institutions at the supranational EU-level,[6] seems to increase the divide between the needs of the consumer-voter and policymakers' ability to efficiently deliver on those needs.

In the Eurozone (EZ), the fall of trust in the governance structure of the EU, the rise of Euroscepticism more generally, and electoral polarization can be attributed to two major phenomena. The first is the so-called policy straitjacket: the greater difficulty of the EZ countries to independently implement countercyclical policies to address globalization shocks and the 2008 ?11 financial and sovereign debt crisis deepened by top-down monetary and fiscal constraints. The second is more of a globalization challenge: the greater incentive for Western firms to relocate production from the EZ to Eastern European countries (due to lower production costs).[7]

Policymakers now face a different set of challenges tied to the adjustment costs of increased globalization and immigration flows. Since there are yet no off-the-shelf policy solutions to these challenges, haphazard solutions are proposed, such as the closure of borders, erection of trade barriers, and defection from the EU.

The mistrust of EU institutions is largely explained by the poor economic performance of the EZ, which correlates with the populist vote.[8] This correlation is stronger in debtor countries.[9] Using regional data from across Europe, a strong correlation can be observed between increases in unemployment and voting tendencies for non-traditional (far left, far right, and Eurosceptic), mostly populist parties. Moreover, a relation between the increase in unemployment and decline in trust in national and EU political institutions is also found.[10]

 

Populism in Italy

In Italy, two variants of populism have recently gained electoral ground: the Five Star Movement (M5S), which mostly appeals to the left-wing voter; and the Lega, which mostly appeals to the right-wing voter.

From 1 June 2018 to 5 September 2019 both parties composed the government coalition, the so-called first Conte government, representing a unique populist experience in the European political scenario in terms of a shared executive. The recently installed second Conte government (5 September 2019) sees the Lega replaced by Italy's Democratic Party (a “traditional” left-wing party, inherited from the old communist one) and an offshoot of it (Liberi e Uguali). Thus, one variant of populism is still at Italy's helm.

Already in the Parliamentary elections of February 2013, a significant majority of Italian citizens voted populist. In the Chamber of Deputies, the M5S received 25.6 percent of votes and the Northern Lega (at the time still a regionalist party, hence the Northern adjective) received 4 percent; in the Senate, the M5S obtained 23.8 percent of votes and the Northern Lega 4.4 percent. In the most recent national elections in March 2018, M5S obtained 32.7 percent and the (now) Lega 17.4 percent in the Chamber of Deputies; while the M5S grew to 32.2 percent and the Lega to 17.6 percent in the Senate.[11]

M5S and the Lega both call for Souverainism, though in different ways. The M5S is critical of globalization, fiscal austerity, and economic competition. Notwithstanding the risk of recession and the public debt issue, the M5S privileges current expenditures, such as the introduction of basic income and pensions from early retirement as a safety net. Their electorate is politically sensitive to such proposals, particularly while education and infrastructure investments remain neglected. The Lega bases its policy interventions on increased consumer-voter safety (crime reduction) and reduced immigration (often equating increased crime with increased immigration).

Since there are yet no off-the-shelf policy solutions to these challenges, haphazard solutions are proposed, such as the closure of borders, erection of trade barriers, and defection from the EU.

Four Ideological “Regularities” of Populism

Our observations suggest four ideological “regularities” of populism. The first regularity is an anti-establishment view that partitions the socio-economic world into two: the elite and the non-elite. One elite is the EU; another is finance. Populism represents the average consumer-voter — the non-elite — and hence it is against any elite. Populists claim to promote the interests of the average consumer-voter against the elites and make use of anti-elite and anti-establishment demagogy based on the concept of the people as a monolithic, homogeneous, and virtuous body. They consider themselves as the only legitimate representatives of the people and, in so doing, delegitimize other parties, associations, and groups. Broadly, there is distrust in “civil society”. Indeed, according to populism, there is no intermediate space between people and elites. Non-populist parties, associations, and groups provide alternative ideological anchors, identities, and voice mechanisms, especially after severe shocks. As a result, civil participation usually decreases when populist parties are in power.[12]

The second regularity is a strong nationalist orientation. The orientation does not favor democracy, and in fact, is opposed to it. That is to say that a pluralism of perspectives is not encouraged. There is accordingly an attempt to capitalize support through cleavages of various types (cultural, economic, ethnic, religious, social, etc.). Populist leaders accommodate people's fears and enthusiasms, undermining citizens' confidence in traditional parties whose policies are perceived as ineffective in addressing the economic insecurity generated by fast globalization, massive migration, and financial crises. Moreover, feeling betrayed by traditional parties, voters vote against the establishment even though new political leaders may be incompetent.[13] This second regularity can be seen as representing the complementary side of the first.

The third regularity is policy myopia motivated by political expediency: the promotion of short-term policies based on demagogy. There is no concern for long-term or indirect consequences of policy. In fact, the more extremist policies are perceived as sending positive signals to the consumer-voter in terms of indicating that populism is not captured by special interests. The strategic choice to enter the political arena then depends on the intensity of popular disappointment, which in turn depends on the most relevant determinants of economic insecurity (e.g., a large inflow of immigrants or a globalization shock, or a marked increase in income concentration and inequality); this intensity has to be large enough to outweigh the entry cost.[14]

The fourth regularity hinges on immigration and refugees. In other words, this is the outsider as a threat to the insider that leaves refugee ships at sea. One often-played policy card is linking immigration directly to terrorism. Another is the immigrant as a threat to job opportunities of the native. The “macro” implication is a move towards commercial autarky: the introduction of tariffs, import duties, and other trade restrictions on goods, labor, and services. There is a push for the political alteration of the terms of trade, specialization, and comparative advantage.[15]

 

Final Thoughts

The political lure of populism is its ability to cut across familiar left-right distinctions, conveniently appropriating elements of both. It appeals to the many, because it plays political tunes across the political spectrum. It is variegated, and at the same time, lumpy. Its taste for a good society is seasoned with myopia. The composite nature of populist ideology is the active strength of populism. The passive strength of populism lies in the inability of “traditional” parties to re-invent themselves in light of times that are changing at quicker rates than before, where the increasingly technologically savvy consumer-voter is more informed than in the past and demands quicker policy responses and less political distance with political representatives. In conclusion, populism needs more credible political competition.


[1] Tito Boeri, Prachi Mishra, Chris Papageorgiou & Antonio Spilimbergo, “Populism and civil society,” IMF Working Paper No. 18/245, 16 November 2018.

[2] See, for example, Noam Gidron & Bart Bonikowski, “Varieties of populism: Literature review and research agenda,” Harvard University, Weatherhead Working Paper No. 13-0004 (2013); Ronald F. Inglehart & Pippa Norris, “Trump, Brexit, and the rise of populism: Economic have-nots and cultural backlash,” Harvard Kennedy School Working Paper No. RWP16-026 6 August 2016; Cas Mudde & Cristobar R. Kaltwasser, Populism: A Very Short Introduction, (New York: Oxford University Press, 2017).

[3] Luigi Guiso, Helios Herrera, Massimo Morelli & Tommaso Sonno, “Populism: Demand and supply,” CEPR Discussion Paper No. DP11871 (February 2017); Rafael di Tella & Julio J. Rotemberg, “Populism and the return of the ‘Paranoid Style’: Some evidence and a simple model of demand for incompetence as insurance against elite betrayal,” NBER Working Paper No. 22975 (December 2016).

[4] Gregor Fitzi, Juegen G. Mackert, & Bryan S. Turner (eds.), Populism and the Crisis of Democracy, Volume 1: Concepts and Theory, (London: Routledge, 2018).

[5] Dani Rodrik, “Populism and the economics of globalization,” Journal of International Business Policy, Vol. 1, No. 1-2 (2018), pp. 12-33.

[6] Hanspeter Kriesi, “The populist challenge,” West European Politics, Vol. 37, No. 2 (2014), pp. 361-78; Hanspeter Kriesi & Takis S. Papas (eds.), European Populism in the Shadow of the Great Recession (Colchester: ECPR Press, 2016).

[7] Luigi Guiso, Helios Herrera, Massimo Morelli & Tommaso Sonno, “Global crises and populism: The role of Eurozone institutions,” Economic Policy, Vol. 34, No. 97 (2019), pp. 95-139.

[8] Christian Dustmann, Barry Eichegreen, Sebastian Otten, André Sapir, Guido Tabellini & Gylfi Zoega, Europe’s Trust Deficit: Causes and Remedies. Monitoring International Integration 1 (London: Centre for Economic Policy Research, 2017).

[9] Chase Foster & Jeffry Frieden, “Crisis of trust: Socio-economic determinants of Europeans’ confidence in government,” European Union Politics, Vol. 18, No. 4 (2017), pp. 511-35.

[10] Yann Algan, Sergei Guriev, Elias Papaioannou & Evgenia Passari, “The European trust crisis and the rise of populism,” Brookings Papers on Economic Activity, (Fall 2017), pp. 309-82.

[11] Data from the Italian Ministry of Interior: http://www.interno.gov.it/it

[12] Tito Boeri, Prachi Mishra, Chris Papageorgiou & Antonio Spilimbergo, “Populism and civil society,” IMF Working Paper No. 18/245, (16 November 2018).

[13] Rafael di Tella & Julio J. Rotemberg (December 2016).

[14] Daron Acemoglu, Georgy Egorov & Konstantin Sonin, “A political theory of populism,” Quarterly Journal of Economics, Vol. 128, No. 2 (May 2013), pp. 771-805.

[15] Italo Colantone & Piero Stanig, “The trade origins of economic nationalism: Import competition and voting behavior in Western Europe,” American Journal of Political Science, Vol. 62, No. 4 (October 2018), pp. 936-53.

CONTRIBUTOR
Emma Galli
Emma Galli

Professor Emma Galli is affiliated with the Department of Social and Economic Sciences, Sapienza University of Rome, Italy.

Giampaolo Garzarelli
Giampaolo Garzarelli

Professor Giampaolo Garzarelli is affiliated with the Department of Social and Economic Sciences, Sapienza University of Rome, Italy and with IPEG, SEBS, University of the Witwatersrand, Johannesburg, South Africa.

This issue was published in collaboration with the Friedrich Naumann Foundation Turkey Office.
From the Desk of the Editor TPQ’s Fall 2019 issue, published in collaboration with the Friedrich Naumann Foundation, titled Populism and the Age of Upheaval, examines the rise of populism and its impact on the international order – from governance issues to the environment to gender ideology. Since 2016, the world has been monitoring and trying to forecast the turnout of a series of events that started with...
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