A comprehensive overview of how globalization gave rise to populism
Globalization was not the only shock that destroyed “established social contracts” but it was the only shock that got the stigma of unfairness, unlike technology, argues Rodrik. When the globalization shock takes the form of immigration and refugees, as in advanced economies in Europe, the ensuing populist movement is right wing. When it takes the form of trade, finance and foreign investment, as in Southern Europe and Latin America, the ensuing populist movement is left-wing. Rodrik concludes by saying “… it is doubtful that populism will be going away. The world’s economic-political order appears to be at an inflection point, with its future direction hanging very much in balance.”
Populism and the economics on globalization
Author: Dani Rodrik
From: Harvard University
Populism is here to stay
Guiso and al. show that in Europe the prolonged stagnation that followed the Great Recession did not only give rise to populist parties but also forced traditional parties, facing falling support and increased demand for short-term economic security, to shift towards populists policies as well. They find that “no counter-populist movement successfully emerged to capture the votes of those citizens who see the dangers of an excessive focus on protectionism and the short run.”
Demand and Supply of Populism
Authors: Luigi Guiso, Helios Herrera, Massimo Morelli, Tommaso Sonno
From: EIEF – Warwick University – Bocconi University – Université Catholique de Louvain
This newsletter’s picture was first published on the blog of Harvard University’s EPICENTER
