Populist Leaders and the Economy

Manuel Funke (1) , Moritz Schularick (2, 3, 4) , Christoph Trebesch (1, 5, 4)

1 Kiel Institute for the World Economy
2 ECON - Département d'économie (Sciences Po)
3 University of Bonn
4 CEPR - Center for Economic Policy Research
5 Kiel University

Populism at the country level is at an all-time high, with more than 25% of nations currently governed by populists. How do economies perform under populist leaders? We build a new longrun cross-country database to study the macroeconomic history of populism. We identify 51 populist presidents and prime ministers from 1900 to 2020 and show that the economic cost of populism is high. After 15 years, GDP per capita is 10% lower compared to a plausible nonpopulist counterfactual. Economic disintegration, decreasing macroeconomic stability, and the erosion of institutions typically go hand in hand with populist rule.

Keywords: Populism; Protectionism; Institutions

Domains: Humanities and Social Sciences; Economics and Finance

Manuel Funke, Moritz Schularick, Christoph Trebesch. Populist Leaders and the Economy. 2022. ⟨hal-03881225⟩