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Growth and Extremism

  • Markus Brueckner
  • Hans Peter Gruener
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    We argue that the growth rate, but not the level of aggregate income, affects the support for political extremism. In our model extreme parties offer benefits to a subset of the population; and there exists uncertainty over whether the same subset of individuals will receive these benefits in the future. Based on a panel of 16 European countries, our empirical analysis shows that lower growth rates are associated with a significant increase in right-wing extremism. We do not find a systematic effect on left-wing extremism. Uncertainty over what group will have incomes expropriated in the future may explain these results.

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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp639.pdf
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    Paper provided by Australian National University, College of Business and Economics, School of Economics in its series ANU Working Papers in Economics and Econometrics with number 2016-639.

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    Date of creation: Jun 2016
    Handle: RePEc:acb:cbeeco:2016-639
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    1. Robert Barro, 1973. "The control of politicians: An economic model," Public Choice, Springer, vol. 14(1), pages 19-42, March.
    2. Markus Brückner & Antonio Ciccone & Andrea Tesei, 2012. "Oil Price Shocks, Income, and Democracy," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 389-399, May.
    3. Elinder, Mikael & Jordahl , Henrik & Poutvaara, Panu, 2008. "Selfish and Prospective Theory and Evidence of Pocketbook Voting," Working Paper Series 2008:7, Uppsala University, Department of Economics.
    4. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
    5. Artale, Angelo & Gruner, Hans Peter, 2000. "A Model of Stability and Persistence in a Democracy," Games and Economic Behavior, Elsevier, vol. 33(1), pages 20-40, October.
    6. Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," American Economic Review, American Economic Association, vol. 94(4), pages 1034-1054, September.
    7. Alesina, Alberto & Londregan, John, 1993. "A Model of the Political Economy of the United States," Scholarly Articles 4552529, Harvard University Department of Economics.
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