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The Wild Bunch! An empirical note on populism and economic institutions

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  • Martin Rode

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  • Julio Revuelta

Abstract

The debate on populism has recently been revitalized by the rise of new political actors, especially in Latin America and Europe. Despite the renewed interest, the concept of populism remains vague, complicating any empirical investigation on its political and economic outcomes. Still, all populist politicians strongly emphasize the defense of the common man’s interest against those of privileged elites, suggesting that such governments will have notable implications for economic policy and institutions. Using a non-partisan indicator of populism, this paper seeks to assess the impact of populist policies on institutional change, as measured by the economic freedom of the world index. Results indicate that populist governments actively reduce economic freedom. In particular, they erode legal security, reduce freedom to trade, and tighten economic regulation. Findings expand on previous research with empirical methodology, questioning the importance of ideological orientation in some definitions of populism. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Martin Rode & Julio Revuelta, 2015. "The Wild Bunch! An empirical note on populism and economic institutions," Economics of Governance, Springer, vol. 16(1), pages 73-96, February.
  • Handle: RePEc:spr:ecogov:v:16:y:2015:i:1:p:73-96
    DOI: 10.1007/s10101-014-0154-5
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. van Staveren, I.P., 2017. "Has populism reached economics?," ISS Working Papers - General Series 361, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Niklas Potrafke, 2016. "Policies against human trafficking: the role of religion and political institutions," Economics of Governance, Springer, vol. 17(4), pages 353-386, November.
    3. Joshua C. Hall, 2016. "Institutional convergence: exit or voice?," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(4), pages 829-840, October.
    4. van Staveren, I.P., 2017. "Has populism reached economics? Two criteria for assessing normative empirical concepts in economics," ISS Working Papers - General Series 631, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    5. Arye L. Hillman & Niklas Potrafke, 2016. "Economic Freedom and Religion: An Empirical Investigation," CESifo Working Paper Series 6017, CESifo Group Munich.
    6. Gouda, Moamen & Potrafke, Niklas, 2016. "Gender equality in Muslim-majority countries," Economic Systems, Elsevier, vol. 40(4), pages 683-698.
    7. Claudio Detotto & Bryan C. McCannon, 2017. "Economic freedom and public, non-market institutions: evidence from criminal prosecution," Economics of Governance, Springer, vol. 18(2), pages 107-128, May.
    8. repec:sae:pubfin:v:46:y:2018:i:2:p:249-275 is not listed on IDEAS

    More about this item

    Keywords

    Populism; Democracy; Economic institutions; Economic policy; N20; P44; P48;

    JEL classification:

    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • P44 - Economic Systems - - Other Economic Systems - - - National Income, Product, and Expenditure; Money; Inflation
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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