1. “Demand and Supply of Populism” Luigi Guiso (EIEF and CEPR) Helios Herrera (University of Warwick) Massimo Morelli (Università Bocconi and CEPR) Tommaso Sonno (Louvain, LSE and F.R.S.-FNRS) June 2017
Now: 36 slides: drop 43,44,45 on mating=> down to 33. Drop 31 on variance decomposition and merge 38 and 39 (on persistence)=> down to 31. Drop slide 47 on implications or slide 48 on conclusions => down to 30.
COMMENTS: instead of 2013 use a different year to show the basic correlations to skip discussions on the drop at the top 1% 1

2. Populism: Latin America XX Century
Assumed 47/1, observed 7/1

3. Populism: Europe XXI Century
Assumed 47/1, observed 7/1

4. Non-Europe XXI Century
Assumed 47/1, observed 7/1

5. Recent Literature Inglehart & Norris (2017)
Demand side (ESS) (‘cultural backlash’)
Algan, Guriev, Papaioannou & Passari (2017); Guiso, Sapienza, Zingales (2015)
European Trust Crisis (ESS) (crisis).
Autor et al. (2016), and Colantone & Stanig (2017)
Global (China) Competition in US and EU increases political extremism
Becker, Fetzer & Novy (2017)
Drivers of Brexit Vote: Education, Economic Insecurity
Di Tella & Rotenberg (2017)
Trump: betrayal-averse voters
Type dependence

6. Goals: Demand and Supply
Profile of the Populist Voter (Europe)
Turnout Effects
Drivers of Populist Vote
Supply
Entry/existence of Populist Parties
Policy Response of Traditional Parties
Assumed 47/1, observed 7/1

7. What is Populism? No Clear Def….
`Populists claim to promote the interest of common citizens against the elites; but pander to people’s fear and enthusiasm promoting policies without regard to the consequences for the country…’
(Encyclopaedia Britannica)

8. “Theoretical” Definition of Populism: 3D
Rhetoric: claims to promote people’s interest: anti-elite
Protection: panders to people’s fears
Concealing: long-term consequences: ‘short-termism’
Type dependence

9. Van Kessel (2015) Pop-Classification
a) Portrays “the people'' as virtuous and essentially homogenous;
b) Advocates popular sovereignty, as opposed to elitist rule;
c) Defines itself against the political establishment, alleged to act against the interest of the people
After……checked by country experts:
57 populist parties in 26/33 European Countries ( )
Matches with Encyclopaedia Britannica, Part 1: Rhetoric, observable
Time varying definition
``the people'' as virtuous and essentially homogenous;
b) advocates popular sovereignty, as opposed to elitist rule; c) defines
itself against the political establishment, which is alleged to act
against the interest of the people.) a) portrays ``the people'' as virtuous and essentially homogenous;
against the interest of the people the interest of the people.

10. Kessel: Validating our 3D-Pop Traits (detail)
CHES: Chapel Hill Expert Survey ( )
Scores 1-10: For each of 3-D…take the average of each component (time)
Rhetoric: Anti-Elite, Corruption
Short-Term Protection: Immigration, State Intervention, Nationalism, Redistribution, Regulation
Concealing: Growth vs Environment, International Security
Type dependence

11. Pop-Traits and Kessel Classification
Type dependence
Controlling for Left/Right Wing party

12. What drives populist demand : “theory”
Economic Insecurity
Experienced
Potential
Ability to detect long run costs of populist policies
Preferences
Risk aversion
Time discount
Beliefs and attitudes:
Trust in political parties , attitudes towards immigrants

13. Data: European Social Survey (ESS)
Face-to-face interviews
7 waves: …..(8th wave: 2016?)
Core questionnaire: socio-economic-political-psychological- demographic variables
Participation: ‘Some people don't vote nowadays for one reason or another. Did you vote in the last [country name] national election in [month/year]?’
Voting: ‘Which party did you vote for in that election?’ [party list]
Validation

14. ESS Proxies for Model Parameters
Perception of long run costs of populist policies (π)
Education: years of schooling
Attention to Politics: News watching (good), TV watching (bad)
Economic Insecurity (y,q)
Financial Distress: recent unemployment, hard to live with current income
Exposure to Globalization: blue collar manufacturing job
Exposure to labour market competition: (immigration)

15. ESS: Proxies for…. Trust in Politics and Politicians (σ)
Trust in Political Parties
Risk Aversion (δ, non-significant)
How important is taking risks in life

16. Populist Vote and Voter Participation
Covariate
Populist Vote
Participation
Age
0.836***
0.853***
Education
-0.225***
0.477***
-0.185***
0.463***
TV Watching
0.0160**
***
***
News Watching
0.0620***
0.0538***
Female
-0.124***
***
-0.122***
***
Right Wing
0.0552***
0.0118***
0.0420***
0.0109***
Unemployed
-0.188***
-0.177***
Income Difficulty
-0.147***
0.0515**
-0.139***
Exposure to
Globalization
0.113***
-0.101***
0.121***
***
Net Migration
0.290*
***
Trust in Parties
***
0.0524***
Few immig from EU
0.109***
***
Assumed 47/1, observed 7/1

17. Robustness All countries Time*Country No new party
Assumed 47/1, observed 7/1
All countries
Time*Country
No new party

18. The Causality Chain
What drives Distrust? Thus…what drives Pop-Voting & Abstention?
Our Claim: Economic Difficulty affects PopVoting: Directly & Indirectly
Assumed 47/1, observed 7/1

19. Causality Chain: Micro Evidence

20. Pseudo-Panel 5-year-gender-country cohorts Followed on 7 waves ESS
294 people per cohort on average (8% of them < 50)
756 cohorts
Assumed 47/1, observed 7/1

21. Pseudo-Panel: Economic Effects
Assumed 47/1, observed 7/1
P-P: Econ-Difficulty (direct & indirect) effect on PopVoting?

22. Italy

23. Greece
GREECE
SPAIN
FRANCE

24. Supply Side: Populist Supply
Assumed 47/1, observed 7/1

25. Populist Parties on Country Characteristics
Average Economic insecurity => more likely a populist country is present or enters the market
Country institutional features matter
Assumed 47/1, observed 7/1

26. ‘Multiplier Effects’ of Populism
CHES ISSUES-j:
1. European Integration
2. European Policy
3. Ideological Issues (left-right)
4. Policy Issues (redistribution)
POLICY DISTANCE
𝐷 𝑖𝑗𝑐𝑡 = (𝑥 𝑖𝑗𝑐𝑡 𝑁𝑃 − 𝑥 𝑗𝑐𝑡 𝑃 ) 2
i: NP-Party
j: Issue
c: Country
P: Largest Pop-Party
x: Policy Position
Assumed 47/1, observed 7/1

27. ‘Multiplier Effects’ of Populism
Ideological Issues
European Integration
European Policy
Policy Issues
Total
Assumed 47/1, observed 7/1
Populist success is imitated
Non populist adapt their programs

28. P-Party Changes Position?
𝑥 𝑗𝑐𝑡 𝑃 =α+𝑓 𝑃 + 𝑓 𝑡 + β𝑠 𝑡−1 𝑃 + ε 𝑗𝑐𝑡
Assumed 47/1, observed 7/1
β non-significative (with P fixed effect, significant without it).
P-Party does not change position with its vote share

29. Takeaways Economy is main driver of: 1. Distrust towards parties
2. Worsening attitudes towards immigrants
Not Exogenous Cultural Shift (Inglehart & Norris 2016)).
Btw: Asia did not have this cultural backlash….it seems.
Assumed 47/1, observed 7/1

30. Is there Populism in Asia?
Geography – i.e. distance - still matters

31. Broader View Poor EU micro-response to globalization & immigration
from both markets and from governments (coordination)
Distrust in both left and right, scope for anti-elite rhetoric to succed
Assumed 47/1, observed 7/1

32. CHES: Chapel Hill Expert Survey 1999-2014
D1: -Anti-Elite and Anti-Corruption Salience: 10 very important
D1 - Deregulation: 10 opposes deregulation
D2 - Immigration Policy: 10 in favour to tough policy
D2 - Spending vs Taxes: 0 increase public service - 10 reduce taxes
D2 - Economic Intervention: 10 favour state intervention
D2 - Nationalism: 0 cosmopolitanism 10 nationalism
D2 - Redistribution: 10 favor redistribution
D3 - Growth vs Environ: 10 growth regardless environment protection
D3 - International Security: 10 opposes troop deployment
BACK
``the people'' as virtuous and essentially homogenous;
b) advocates popular sovereignty, as opposed to elitist rule; c) defines
itself against the political establishment, which is alleged to act
against the interest of the people.) a) portrays ``the people'' as virtuous and essentially homogenous;
against the interest of the people the interest of the people.

33. Validating ESS Data on Voting (Back)
Correlation of actual turnout with ESS: 80%
Regression Coefficient not different from 1
(Outliers: over reporting in some countries, e.g. Bulgaria)
Populist-Vote Correlation: 63%, but without outliers: 85%
Systematic understating of Populist-Vote
12k = 8% of people refuse to answer

34. All Countries Age -0.0622 0.836*** -0.0260 0.853*** Education
Covariate
PopVote
Vote
Age
0.836***
0.853***
Education
-0.225***
0.477***
-0.185***
0.463***
TV Watching
0.0160**
***
***
News Watching
0.0620***
0.0538***
Female
-0.124***
***
-0.122***
***
Right Wing
0.0552***
0.0118***
0.0420***
0.0109***
Unemployed
-0.188***
-0.177***
Income Difficulty
-0.147***
0.0515**
-0.139***
Exposure to
Globalization
0.113***
-0.101***
0.121***
***
Net Migration
0.290*
***
Trust in Parties
***
0.0524***
Assumed 47/1, observed 7/1