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Prudent populists? The short-term macroeconomic impact of populist policies in Poland

Author

Listed:
  • Michał Brzeziński

    (University of Warsaw, Faculty of Economic Science)

  • Katarzyna Sałach-Dróżdż

    (University of Warsaw, Faculty of Economic Science)

Abstract

Recent research shows that populist governments in general depress countries’ economic growth and fail to improve income distribution. We study the short-term macroeconomic consequences of populist policies implemented in Poland since 2015. Using the augmented synthetic control method, we find that the populists boosted the GDP per capita by almost 8% between 2016 and 2019. We do not find any effect of populism on inflation and estimate only small labor market impacts. The populists improved tax revenue collection and reduced public debt. A generous child benefit program and other redistributive policies introduced by the populists significantly reduced overall poverty and almost eradicated absolute child poverty. Our results imply that anti-establishment populists may be macroeconomically prudent, at least in the short run.

Suggested Citation

  • Michał Brzeziński & Katarzyna Sałach-Dróżdż, 2023. "Prudent populists? The short-term macroeconomic impact of populist policies in Poland," Working Papers 2023-02, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2023-02
    as

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    File URL: https://www.wne.uw.edu.pl/download_file/2496/0
    File Function: First version, 2023
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    References listed on IDEAS

    as
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    5. Paweł Strzelecki & Jakub Growiec & Robert Wyszyński, 2022. "The contribution of immigration from Ukraine to economic growth in Poland," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(2), pages 365-399, May.
    6. Magda Iga & Kiełczewska Aneta & Brandt Nicola, 2020. "The effect of child benefit on female labor supply," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-18, March.
    7. Jan Gromadzki & Katarzyna Sałach & Michał Brzeziński, 2024. "When populists deliver on their promises: the electoral effects of a large cash transfer programme in Poland," Economica, London School of Economics and Political Science, vol. 91(361), pages 320-345, January.
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    More about this item

    Keywords

    populism; economic growth; public finance; income distribution; Poland;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P17 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Performance and Prospects

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