IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v185y2020i1d10.1007_s11127-019-00745-w.html
   My bibliography  Save this article

Economic growth and political extremism

Author

Listed:
  • Markus Brückner

    (Australian National University)

  • Hans Peter Grüner

    (University of Mannheim
    CEPR)

Abstract

We argue that the growth rate, but not the level of aggregate income, affects the support for extreme political parties. In our model, extreme parties offer short-run benefits to part of the population at the expense of a minority. Growth effects on the support for such parties arise when uncertainty exists over whether the same subset of individuals will receive the same benefits in the future. More people are willing to take political risks if economic growth is slow. Based on a panel of 16 European countries, our empirical analysis shows that slower growth rates are associated with a significant increase in right-wing extremism. We find no significant effect of economic growth on the support for extreme left-wing parties.

Suggested Citation

  • Markus Brückner & Hans Peter Grüner, 2020. "Economic growth and political extremism," Public Choice, Springer, vol. 185(1), pages 131-159, October.
    • Handle: RePEc:kap:pubcho:v:185:y:2020:i:1:d:10.1007_s11127-019-00745-w
    DOI: 10.1007/s11127-019-00745-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11127-019-00745-w
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11127-019-00745-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Markus Brückner & Antonio Ciccone & Andrea Tesei, 2012. "Oil Price Shocks, Income, and Democracy," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 389-399, May.
    2. Alesina, Alberto & Londregan, John & Rosenthal, Howard, 1993. "A Model of the Political Economy of the United States," American Political Science Review, Cambridge University Press, vol. 87(1), pages 12-33, March.
    3. Artale, Angelo & Gruner, Hans Peter, 2000. "A Model of Stability and Persistence in a Democracy," Games and Economic Behavior, Elsevier, vol. 33(1), pages 20-40, October.
    4. Thiemo Fetzer, 2019. "Did Austerity Cause Brexit?," American Economic Review, American Economic Association, vol. 109(11), pages 3849-3886, November.
    5. Markus Brückner & Antonio Ciccone, 2011. "Rain and the Democratic Window of Opportunity," Econometrica, Econometric Society, vol. 79(3), pages 923-947, May.
    6. Rao, Matthew & Raschky, Paul A. & Tombazos, Christis G., 2018. "Political extremism and economic activity," Economics Letters, Elsevier, vol. 170(C), pages 59-62.
    7. Peter Bernholz, 2017. "Totalitarianism, Terrorism and Supreme Values," Studies in Public Choice, Springer, number 978-3-319-56907-9, December.
    8. Edo, Anthony & Giesing, Yvonne & Öztunc, Jonathan & Poutvaara, Panu, 2019. "Immigration and electoral support for the far-left and the far-right," European Economic Review, Elsevier, vol. 115(C), pages 99-143.
    9. Andrew Leigh, 2009. "Does the World Economy Swing National Elections?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(2), pages 163-181, April.
    10. Acemoglu, Daron & Johnson, Simon & Robinson, James A. & Yared, Pierre, 2009. "Reevaluating the modernization hypothesis," Journal of Monetary Economics, Elsevier, vol. 56(8), pages 1043-1058, November.
    11. Daron Acemoglu & Simon Johnson & James A. Robinson & Pierre Yared, 2008. "Income and Democracy," American Economic Review, American Economic Association, vol. 98(3), pages 808-842, June.
    12. Andrews,Donald W. K. & Stock,James H. (ed.), 2005. "Identification and Inference for Econometric Models," Cambridge Books, Cambridge University Press, number 9780521844413, January.
    13. Martin Halla & Alexander F. Wagner & Josef Zweimüller, 2017. "Immigration and Voting for the Far Right," Journal of the European Economic Association, European Economic Association, vol. 15(6), pages 1341-1385.
    14. Edward L. Glaeser, 2005. "The Political Economy of Hatred," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(1), pages 45-86.
    15. Elinder, Mikael & Jordahl, Henrik & Poutvaara, Panu, 2015. "Promises, policies and pocketbook voting," European Economic Review, Elsevier, vol. 75(C), pages 177-194.
    16. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
    17. Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," American Economic Review, American Economic Association, vol. 94(4), pages 1034-1054, September.
    18. Jess Benhabib & Adam Przeworski, 2006. "The political economy of redistribution under democracy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(2), pages 271-290, October.
    19. Hans Peter Gruner & Giacomo Corneo, 2000. "Social Limits to Redistribution," American Economic Review, American Economic Association, vol. 90(5), pages 1491-1507, December.
    20. Durr, Robert H., 1993. "What Moves Policy Sentiment?," American Political Science Review, Cambridge University Press, vol. 87(1), pages 158-170, March.
    21. Robert Barro, 1973. "The control of politicians: An economic model," Public Choice, Springer, vol. 14(1), pages 19-42, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Markus Brueckner & Hans Peter Gruener, 2016. "Growth and Extremism," ANU Working Papers in Economics and Econometrics 2016-639, Australian National University, College of Business and Economics, School of Economics.
    2. Thorsten Janus & Daniel Riera‐Crichton & Brittany Tarufelli, 2022. "Commodity terms of trade shocks and political transitions," Economics and Politics, Wiley Blackwell, vol. 34(3), pages 465-493, July.
    3. Markus Brückner & Antonio Ciccone, 2011. "Rain and the Democratic Window of Opportunity," Econometrica, Econometric Society, vol. 79(3), pages 923-947, May.
    4. Francesco Caselli & Andrea Tesei, 2016. "Resource Windfalls, Political Regimes, and Political Stability," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 573-590, July.
    5. Lin, Faqin & Sim, Nicholas C.S., 2014. "Baltic Dry Index and the democratic window of opportunity," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 143-159.
    6. Gradstein, Mark & Brückner, Markus, 2012. "Income Growth and Institutional Quality: Evidence from International Oil Price Shocks," CEPR Discussion Papers 8871, C.E.P.R. Discussion Papers.
    7. Karthik Reddy & Moritz Schularick & Vasiliki Skreta, 2020. "Immunity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 531-564, May.
      • Karthik Reddy & Moritz Schularick & Vasiliki Skreta, 2012. "Immunity," Working Papers 12-17, New York University, Leonard N. Stern School of Business, Department of Economics.
      • Karthik Reddy & Moritz Schularick & Vasiliki Skreta, 2013. "Immunity," Working Papers 13-04, New York University, Leonard N. Stern School of Business, Department of Economics.
      • Karthik Reddy & Moritz Schularick & Vasiliki Skreta, 2013. "Immunity," CESifo Working Paper Series 4445, CESifo.
    8. Ngoc Thi Minh Tran & Michael P. Cameron & Jacques Poot, 2021. "How Robust Is the Evidence on the Impact of Diasporas on Institutional Quality in Home Countries?," Kyklos, Wiley Blackwell, vol. 74(1), pages 126-152, February.
    9. Marrero, Ángel S. & Marrero, Gustavo A. & González, Rosa Marina & Rodríguez-López, Jesús, 2021. "Convergence in road transport CO2 emissions in Europe," Energy Economics, Elsevier, vol. 99(C).
    10. BenYishay, Ariel & Betancourt, Roger, 2014. "Unbundling democracy: Political rights and civil liberties," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 552-568.
    11. Lin, Faqin & Sim, Nicholas C.S., 2013. "Trade, income and the Baltic Dry Index," European Economic Review, Elsevier, vol. 59(C), pages 1-18.
    12. Emilio Ocampo, 2019. "The Economic Analysis of Populism. A Selective Review of the Literature," CEMA Working Papers: Serie Documentos de Trabajo. 694, Universidad del CEMA.
    13. Dorsch, Michael T. & Maarek, Paul, 2020. "Economic downturns, inequality, and democratic improvements," European Journal of Political Economy, Elsevier, vol. 62(C).
    14. Christian Schultz, 2003. "Information, Polarization and Delegation in Democracy," CESifo Working Paper Series 1104, CESifo.
    15. Lagunoff, Roger, 2006. "Credible communication in dynastic government," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 59-86, January.
    16. Ghazaryan, Armine & Giulietti, Corrado & Wahba, Jackline, 2022. "Terror headlines and voting," Economics Letters, Elsevier, vol. 216(C).
    17. Binswanger, J. & Prüfer, J., 2012. "Democracy, populism, and (un)bounded rationality," Other publications TiSEM 6ebfff9d-e076-4d09-90c6-2, Tilburg University, School of Economics and Management.
    18. Ngoc Thien Anh Pham & Nicholas Sim, 2020. "Shipping cost and development of the landlocked developing countries: Panel evidence from the common correlated effects approach," The World Economy, Wiley Blackwell, vol. 43(4), pages 892-920, April.
    19. Alvaro Forteza & Juan S. Pereyra, 2021. "Separation of powers with ideological parties," Journal of Theoretical Politics, , vol. 33(3), pages 333-382, July.
    20. Cáceres, Neila & Malone, Samuel W., 2015. "Optimal Weather Conditions, Economic Growth, and Political Transitions," World Development, Elsevier, vol. 66(C), pages 16-30.

    More about this item

    Keywords

    Economic growth; Political extremism; Inequality;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:185:y:2020:i:1:d:10.1007_s11127-019-00745-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.