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The Role of Economic Uncertainty in Rising Populism in the EU

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  • Giray Gozgor

Abstract

This paper examines the impact of economic uncertainty shocks on the populist voting behavior in the panel dataset of 24 European Union (EU) countries for the period from 1980 to 2020. In so doing, we focus on the shares of total populism, right-wing populism, and left-wing populism votes as well as a new indicator of economic uncertainty, so-called, the “World Uncertainty Index (WUI).” Using the fixed-effects, bias-corrected least-squares dummy variable (LSDVC), and Instrumental Variables (IV) estimations, we show that a higher level of the WUI is positively related to total populism and right-wing populist voting behavior. The baseline results remain consistent when we deal with potential issues of endogeneity, to address omitted variable bias, and to exclude the outliers.

Suggested Citation

  • Giray Gozgor, 2020. "The Role of Economic Uncertainty in Rising Populism in the EU," CESifo Working Paper Series 8499, CESifo.
    • Handle: RePEc:ces:ceswps:_8499
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    Cited by:

    1. Barone, Guglielmo & Kreuter, Helena, 2021. "Low-wage import competition and populist backlash: The case of Italy," European Journal of Political Economy, Elsevier, vol. 67(C).

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    More about this item

    Keywords

    populist attitudes in the European Union; voting behaviour; right-wing populism; left-wing populism; uncertainty shocks; economic policy uncertainty;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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