Populist Leaders and the Economy

2023/12/01 by Manuel Funke, Moritz Schularick, Christoph Trebesch · 3 voices · 226 citations
Social Sciences · #Counterfactual thinking #Development economics #Economics #Electoral Systems and Political Participation #Media Influence and Politics #Monetary economics #Per capita #Political science #Politics #Populism #Populism, Right-Wing Movements #Sociology

paper · open access · doi:10.1257/aer.20202045

published in American Economic Review 113(12), 3249-3288 (American Economic Association)

openalex publication_date 2023/12/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/05

Abstract

Populism at the country level is at an all-time high, with more than 25 percent of nations currently governed by populists. How do economies perform under populist leaders? We build a new long-run cross-country database to study the macroeconomic history of populism. We identify 51 populist presidents and prime ministers from 1900 to 2020 and show that the economic cost of populism is high. After 15 years, GDP per capita is 10 percent lower compared to a plausible nonpopulist counterfactual. Economic disintegration, decreasing macroeconomic stability, and the erosion of institutions typically go hand in hand with populist rule. (JEL D72, E23, N10, N40, O43)

Citations

• Economic Insecurity and the Causes of Populism, Reconsidered
• The Populist Zeitgeist
• Estimation and Inference of Impulse Responses by Local Projections
• Exclusionary vs. Inclusionary Populism: Comparing Contemporary Europe and Latin America
• The Time for Austerity: Estimating the Average Treatment Effect of Fiscal Policy
• The Next Generation of the Penn World Table
• Democracy Does Cause Growth
• Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects

Cited by

• Economic insecurity and the demand for populism in Europe
• How substitutable are the classical and radical right?
• Populist Attacks on Academic Freedom: How Populist Leadership Erodes Academic Freedom in Liberal and Electoral Democracies
• How technocratic is the power elite? A new approach and evidence from a mixed-method study of the Danish power elite
• Political Representation Gaps in Europe: Causes and Consequences
• The Effects of Italy’s Unification on Its Dual Development: A Synthetic Control Approach
• Draining the Swamp? Populist leadership and corruption
• The politics of local spending: municipal budget responses to federal election results
• Compensation, austerity and populism: Labor market spending and voting in 16 Western European countries
• “It’s Us against Them”: Populist Rule and Electoral Violence
• What do we owe a place? How the debate about left-behind places is challenging how we distribute public funding and the problems it should address
• Can online shopping and remote work create an opportunity for local property tax reform? The case of Israel
• Populists and fiscal policy: The case of Poland
• Populism and the rule of law: The importance of institutional legacies
• Using Multiple Outcomes to Adjust Standard Errors for Spatial Correlation

Discussions

• Thought so, but now I got proof: Populistu nākšana pie varas palēnina izaugsmi par 10% salīdzinot ar līdzīgām valstīm bez populistiem 15g. griezumā. doi.org/10.1257/aer.... [bsky, 17 points, 0 comments]
• Here it is Funke, M., Schularick, M., & Trebesch, C. (2023). Populist leaders and the economy. American Economic Review, 113(12), 3249–3288. doi.org/10.1257/aer.... [bsky, 1 points, 0 comments]
• Not a brand-new paper, but the topic seems very much on point these days: "Populist Leaders and the Economy" #EconSky #Economy #Populism Link to paper: doi.org/10.1257/aer.... [bsky, 0 points, 0 comments]

Related

• Neoliberal Populism in Latin America and Eastern Europe
• Populism: A Very Short Introduction
• Populism and Democracy on the Individual Level: Building on, Yet Moving Beyond the Supply Side
• The Global Economics of European Populism: Growth Regimes and Party System Change in Europe (The Government and Opposition /Leonard Schapiro Lecture 2017)
• Draining the Swamp? Populist leadership and corruption