Can Economics Illuminate the Populist Movement?
A Discussion of “A Dialogue between a Populist and an Economist”
In an unusually playful academic article, Boeri, Mishra, et al. (2018) write a script of two people, Populist and Economist, arguing over the success (or failure) of economics in explaining the latest wave of populism fever that has spread to many countries around the globe.
The populist is criticizing the economist for focusing too much on economics and missing the true picture.
The economist concedes the field’s first theories focused on “the political economy cycle” evidenced by the incumbent winning if the aggregate economy was good. (p. 191) This would incentivize politicians to run expansionary monetary and fiscal policies ahead of an election to help their victory.
The data is supportive of that theory so it seems natural enough for economists then to hypothesize that negative economic shocks could give rise to populist leaders as the people look to change the system.
However, here the data is not so supportive. The populist gives examples that violate that hypothesis. (p. 191)
- Populists are in power in Poland but there was no economic crisis there in the last 10 years.
- Ireland and Portugal did have…
