Populism: economics or culture?

By studying a model with two ethnic groups, three goods and three skill levels, we have identified situations where a narrowing of self-identification by certain low- and middle-income groups in society does lead to an increased aggregate demand for tariffs. More broadly, in a setting of identity politics, shifts in identification patterns that have entirely non-economic causes can affect political preferences and policy outcomes on economic matters.

[I]ndividuals belonging to associations are less likely to vote for populist parties. In Europe, individuals belonging to associations are 3.2 percent less likely to vote for populist parties during the post global financial crisis period.  We interpret the findings as associations provide ideological anchors, identities, and voice mechanisms; as individual beliefs became more unhinged from ideological anchors post-crisis, people felt more open to voting for new parties. Another interpretation is that associations promote social responsibility and acts as a protective shield against populism.

The cultural and economic arguments may seem to be in tension – if not downright inconsistent – with each other. But, reading between the lines, one can discern a type of convergence. Because the cultural trends – such as post-materialism and urbanization-promoted values – are of a long-term nature, they do not fully account for the timing of the populist backlash. And those who advocate for the primacy of cultural explanations do not in fact dismiss the role of economic shocks. These shocks, they maintain, aggravated and exacerbated cultural divisions, giving authoritarian populists the added push they needed.