The role of economic uncertainty in the rise of EU populism

Giray Gözgör

Public Choice, 2022, vol. 190, issue 1, No 11, 229-246

Abstract: Abstract Economic interests are assumed to be the leading driver of political preferences, and various empirical studies have examined how economic conditions affect political views and voting behavior. Meanwhile, populism is on the rise in European Union (EU) member countries. Against that backdrop, this paper aims to examine the effect of economic uncertainty on populist voting behavior based on a panel dataset of 24 EU countries from 1980 to 2020. We focus on whether total populist, right-wing populist, and left-wing populist votes are affected by a new indicator of economic uncertainty, namely, the World Uncertainty Index (WUI). Relying on a fixed-effects, bias-corrected least squares dummy variable estimator and instrumental variable estimations, we show that a higher WUI increases total populism and right-wing populist voting behavior. The baseline results remain consistent when dealing with potential issues of endogeneity and reverse causality, addressing omitted variable bias, and excluding outliers.

Keywords: Populist attitudes in the European Union; Voting behavior; Right-wing populism; Left-wing populism; Economic uncertainty shocks; Economic policy uncertainty (search for similar items in EconPapers)
JEL-codes: C33 D72 D81 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s11127-021-00933-7

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