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Macroeconomic populism: A formal representation and a suggested interpretation of the Peruvian experience (1985-90)

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  • Daniele Checchi

    (Department of Economics, University of Milan)

Abstract

This paper investigates some reasons for the recurrence of populist governments. When a populist experience is viewed as a political compensation for economic inequalities, the analysis of the emergence of populist government must focus on the interplay of economic and political determinants. A political-economic model with three social groups and three candidates is proposed. It explains the emergence of populist candidates as the result of the existence of a wide informal sector in a polarized society, where pro-labour and pro-capital candidates pursue the exclusive interests of their constituencies. The conditions that make the elections of a populist candidate more likely include the size of the informal sector, the electoral rules, the polarization of the political conflict between left and right and the permanence of the informal sector, notwithstanding past populist experiences. A brief historical outline of Alán García's government in Peru (1985-90) shows that the existence of a wide informal sector in the economy was one of the key features for his electoral platform, for his election and for the theoretical justification of the 'heterodox' policies he implemented.

Suggested Citation

  • Daniele Checchi, 1996. "Macroeconomic populism: A formal representation and a suggested interpretation of the Peruvian experience (1985-90)," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(4), pages 489-516.
    • Handle: RePEc:wly:jintdv:v:8:y:1996:i:4:p:489-516
    DOI: 10.1002/(SICI)1099-1328(199607)8:4<489::AID-JID264>3.0.CO;2-U
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    References listed on IDEAS

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    1. Lopez, Ramon E. & Riveros, Luis A., 1989. "Macroeconomic adjustment and the labor market in four Latin American countries," Policy Research Working Paper Series 335, The World Bank.
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    3. Jeffrey Sachs, 1990. "Social Conflict and Populist Policies in Latin America," International Economic Association Series, in: Renato Brunetta & Carlo Dell’Aringa (ed.), Labour Relations and Economic Performance, chapter 6, pages 137-169, Palgrave Macmillan.
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    5. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-1155, December.
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    Cited by:

    1. Emre Ünal, 2021. "Economic populism and institutional changes in wage–labor relations," Evolutionary and Institutional Economics Review, Springer, vol. 18(2), pages 407-433, September.

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