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The European Trust Crisis and the Rise of Populism

Passari, Evgenia; Algan, Yann; Guriev, Sergei; Papaioannou, Elias (2018), The European Trust Crisis and the Rise of Populism, Brookings Papers on Economic Activity, 48, 2, p. 309-400. 10.1353/eca.2017.0015

Type
Article accepté pour publication ou publié
Date
2018
Journal name
Brookings Papers on Economic Activity
Volume
48
Number
2
Pages
309-400
Publication identifier
Metadata
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Author(s)
Passari, Evgenia
Dauphine Recherches en Management [DRM]
Algan, Yann
Département d'économie (Sciences Po) [ECON]
Guriev, Sergei
Département d'économie (Sciences Po) [ECON]
Papaioannou, Elias
London Business School
Abstract (EN)
We study the implications of the Great Recession for voting for anti-establishment parties, as well as for general trust and political attitudes, using regional data across Europe. We find a strong relationship between increases in unemployment and voting for non-mainstream, especially populist parties. Moreover, increases in unemployment go in tandem with a decline in trust in national and European political institutions, while we find much attenuated effects of unemployment on interpersonal trust. The correlation between unemployment and attitudes towards immigrants is muted, especially for their cultural impact. To advance on causality, we extract the component of increases in unemployment explained by the pre-crisis structure of the economy, in particular the share of construction in regional value added, which is strongly related both to build-up and the burst of the crisis. Our results imply that crisis-driven economic insecurity is a substantial driver of populism and political distrust.
Subjects / Keywords
voting behaviour; work economy; regional economics
JEL
D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes