The European Trust Crisis and the Rise of Populism

Elias Papaioannou, Yann Algan, Sergei Guriev and Evgenia Passari

No 12444, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the implications of the Great Recession for voting for anti-establishment parties, as well as for general trust and political attitudes, using regional data across Europe. We find a strong relationship between increases in unemployment and voting for non-mainstream, especially populist parties. Moreover, increases in unemployment go in tandem with a decline in trust in national and European political institutions, while we find much attenuated effects of unemployment on interpersonal trust. The correlation between unemployment and attitudes towards immigrants is muted, especially for their cultural impact. To advance on causality, we extract the component of increases in unemployment explained by the pre-crisis structure of the economy, in particular the share of construction in regional value added, which is strongly related both to build-up and the burst of the crisis. Our results imply that crisis-driven economic insecurity is a substantial driver of populism and political distrust.

Keywords: Trust; Europe; Crisis; Populism; Voting; Industrial structure; Immigration (search for similar items in EconPapers)
JEL-codes: A13 E02 F02 F22 F33 F68 J15 O43 (search for similar items in EconPapers)
Date: 2017-11
New Economics Papers: this item is included in nep-eec, nep-eur, nep-lab, nep-mac, nep-pke, nep-pol and nep-soc
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Citations: View citations in EconPapers (253)

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Related works:
Journal Article: The European Trust Crisis and the Rise of Populism (2017)
Working Paper: The European trust crisis and the rise of populism (2017)
Working Paper: The European trust crisis and the rise of populism (2017)
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