IDEAS home Printed from https://ideas.repec.org/p/mtu/wpaper/21_09.html
   My bibliography  Save this paper

Understanding the Origins of Populist Political Parties and the Role of External Shocks

Author

Listed:
  • Eugenio Levi

    (Masaryk University)

  • Isabelle Sin

    (Motu Economic and Public Policy Research)

  • Steven Stillman

    (Free University of Bozen-Bolzano)

Abstract

We use electoral survey data to examine the impact that two large external shocks had on the development of New Zealand First (NZF), one of the oldest populist parties in the OECD. We find that structural reforms, which led to large negative impacts on particular locations, and immigration reforms, which led to large spatially concentrated increases in skilled migration, both increased voting for NZF in its first years of existence. These shocks led to changes in political attitudes and policy preferences and had persistent effects on voting for NZF even twenty years later. Overall, they play an important role in explaining the rise of populism in NZ. Understanding how these shocks led to the development of NZF is particularly relevant for thinking about how populism has been extending its reach in the 2010s.

Suggested Citation

  • Eugenio Levi & Isabelle Sin & Steven Stillman, 2021. "Understanding the Origins of Populist Political Parties and the Role of External Shocks," Working Papers 21_09, Motu Economic and Public Policy Research.
  • Handle: RePEc:mtu:wpaper:21_09
    as

    Download full text from publisher

    File URL: https://motu-www.motu.org.nz/wpapers/21_09.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. David Autor & David Dorn & Gordon Hanson & Kaveh Majlesi, 2020. "Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure," American Economic Review, American Economic Association, vol. 110(10), pages 3139-3183, October.
    2. David Mare & Melanie Morten & Steven Stillman, 2007. "Settlement patterns and the geographic mobility of recent migrants to New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 41(2), pages 163-195.
    3. Alabrese, Eleonora & Becker, Sascha O. & Fetzer, Thiemo & Novy, Dennis, 2019. "Who voted for Brexit? Individual and regional data combined," European Journal of Political Economy, Elsevier, vol. 56(C), pages 132-150.
    4. Christian Dustmann & Kristine Vasiljeva & Anna Piil Damm, 2019. "Refugee Migration and Electoral Outcomes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(5), pages 2035-2091.
    5. Eugenio Levi & Rama Dasi Mariani & Fabrizio Patriarca, 2020. "Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 1-32, January.
    6. Dani Rodrik, 2018. "Populism and the economics of globalization," Journal of International Business Policy, Palgrave Macmillan, vol. 1(1), pages 12-33, June.
    7. Edo, Anthony & Giesing, Yvonne & Öztunc, Jonathan & Poutvaara, Panu, 2019. "Immigration and electoral support for the far-left and the far-right," European Economic Review, Elsevier, vol. 115(C), pages 99-143.
    8. John Ahlquist & Mark Copelovitch & Stefanie Walter, 2020. "The Political Consequences of External Economic Shocks: Evidence from Poland," American Journal of Political Science, John Wiley & Sons, vol. 64(4), pages 904-920, October.
    9. Luigi Guiso & Helios Herrera & Massimo Morelli & Tommaso Sonno, 2017. "Demand and Supply of Populism," EIEF Working Papers Series 1703, Einaudi Institute for Economics and Finance (EIEF), revised Feb 2017.
    10. Lewis Evans & Arthur Grimes & Bryce Wilkinson, 1996. "Economic Reform in New Zealand 1984-95: The Pursuit of Efficiency," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1856-1902, December.
    11. Barone, Guglielmo & D'Ignazio, Alessio & de Blasio, Guido & Naticchioni, Paolo, 2016. "Mr. Rossi, Mr. Hu and politics. The role of immigration in shaping natives' voting behavior," Journal of Public Economics, Elsevier, vol. 136(C), pages 1-13.
    12. Guiso, Luigi & Herrera, Helios & Morelli, Massimo & Sonno, Tommaso, 2018. "Populism: Demand and Supply," CEPR Discussion Papers 11871, C.E.P.R. Discussion Papers.
    13. Gibson, John K & Harris, Richard I D, 1996. "Trade Liberalisation and Plant Exit in New Zealand Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 521-529, August.
    14. David Card & Christian Dustmann & Ian Preston, 2012. "Immigration, Wages, And Compositional Amenities," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 78-119, February.
    15. Sascha O Becker & Thiemo Fetzer & Dennis Novy, 2017. "Who voted for Brexit? A comprehensive district-level analysis," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(92), pages 601-650.
    16. Yann Algan & Sergei Guriev & Elias Papaioannou & Evgenia Passari, 2017. "The European Trust Crisis and the Rise of Populism," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(2 (Fall)), pages 309-400.
    17. Stillman, Steven & Velamuri, Malathi & Aitken, Andrew, 2010. "The long-run impact of New Zealand's structural reform on local communities," Journal of Comparative Economics, Elsevier, vol. 38(4), pages 432-448, December.
    18. Manuel Funke & Moritz Schularick & Christoph Trebesch, 2023. "Populist Leaders and the Economy," American Economic Review, American Economic Association, vol. 113(12), pages 3249-3288, December.
    19. Martin Halla & Alexander F. Wagner & Josef Zweimüller, 2017. "Immigration and Voting for the Far Right," Journal of the European Economic Association, European Economic Association, vol. 15(6), pages 1341-1385.
    20. Tella, Rafael Di & Rotemberg, Julio J., 2018. "Populism and the return of the “Paranoid Style”: Some evidence and a simple model of demand for incompetence as insurance against elite betrayal," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 988-1005.
    21. Tito Boeri & Prachi Mishra & Chris Papageorgiou & Antonio Spilimbergo, 2018. "A Dialogue between a Populist and an Economist," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 191-195, May.
    22. Italo Colantone & Piero Stanig, 2019. "The Surge of Economic Nationalism in Western Europe," Journal of Economic Perspectives, American Economic Association, vol. 33(4), pages 128-151, Fall.
    23. Italo Colantone & Piero Stanig, 2018. "The Trade Origins of Economic Nationalism: Import Competition and Voting Behavior in Western Europe," American Journal of Political Science, John Wiley & Sons, vol. 62(4), pages 936-953, October.
    24. Christian Dippel & Robert Gold & Stephan Heblich & Rodrigo Pinto, 2017. "Instrumental Variables and Causal Mechanisms: Unpacking the Effect of Trade on Workers and Voters," CESifo Working Paper Series 6816, CESifo.
    25. Yotam Margalit, 2019. "Economic Insecurity and the Causes of Populism, Reconsidered," Journal of Economic Perspectives, American Economic Association, vol. 33(4), pages 152-170, Fall.
    26. Papps, Kerry L. & Newell, James O., 2002. "Identifying Functional Labour Market Areas in New Zealand: A Reconnaissance Study Using Travel-to-Work Data," IZA Discussion Papers 443, Institute of Labor Economics (IZA).
    27. Bartel, Ann P, 1989. "Where Do the New U.S. Immigrants Live?," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 371-391, October.
    28. Massimo Anelli & Italo Colantone & Piero Stanig, 2019. "We Were the Robots: Automation and Voting Behavior in Western Europe," CESifo Working Paper Series 7758, CESifo.
    29. Yann Algan & Sergei Guriev & Elias Papaioannou & Evgenia Passari, 2017. "The European Trust Crisis and the Rise of Populism," Post-Print hal-02381560, HAL.
    30. Stuhler, Jan & Jaeger, David & Ruist, Joakim, 2018. "Shift-Share Instruments and the Impact of Immigration," CEPR Discussion Papers 12701, C.E.P.R. Discussion Papers.
    31. Yann Algan & Sergei Guriev & Elias Papaioannou & Evgenia Passari, 2017. "The European Trust Crisis and the Rise of Populism," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(2 (Fall)), pages 309-400.
    32. repec:hal:spmain:info:hdl:2441/2i9jel1usb85nr2j7tejsaldfu is not listed on IDEAS
    33. Sascha Becker & Thiemo Fetzer & Dennis Novy & Sascha O. Becker, 2017. "Who Voted for Brexit?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(04), pages 03-05, December.
    34. Joseph G. Altonji & David Card, 1991. "The Effects of Immigration on the Labor Market Outcomes of Less-skilled Natives," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 201-234, National Bureau of Economic Research, Inc.
    35. Colantone, Italo & Stanig, Piero, 2018. "Global Competition and Brexit," American Political Science Review, Cambridge University Press, vol. 112(2), pages 201-218, May.
    36. John McMillan, 1998. "Managing Economic Change: Lessons from New Zealand," The World Economy, Wiley Blackwell, vol. 21(6), pages 827-843, August.
    37. Guillem Riambau & Steven Stillman & Geua Boe-Gibson, 2021. "What determines preferences for an electoral system? Evidence from a binding referendum," Public Choice, Springer, vol. 186(1), pages 179-208, January.
    38. Sergei Guriev & Elias Papaioannou, 2022. "The Political Economy of Populism," Journal of Economic Literature, American Economic Association, vol. 60(3), pages 753-832, September.
    39. repec:hal:spmain:info:hdl:2441/1divsbu8t888r9vqektjbmlqoa is not listed on IDEAS
    40. Moriconi, Simone & Peri, Giovanni & Turati, Riccardo, 2019. "Immigration and voting for redistribution: Evidence from European elections," Labour Economics, Elsevier, vol. 61(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jakub Grossmann & Stepan Jurajda, 2023. "Voting under Debtor Distress," CERGE-EI Working Papers wp744, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    2. Stephen Drinkwater, 2021. "Brexit and the ‘left behind’: Job polarization and the rise in support for leaving the European Union," Industrial Relations Journal, Wiley Blackwell, vol. 52(6), pages 569-588, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eugenio Levi & Isabelle Sin & Steven Stillman, 2024. "The lasting impact of external shocks on political opinions and populist voting," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 349-374, January.
    2. Eugenio Levi & Fabrizio Patriarca, 2020. "An exploratory study of populism: the municipality-level predictors of electoral outcomes in Italy," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(3), pages 833-875, October.
    3. Frédéric Docquier & Lucas Guichard & Stefano Iandolo & Hillel Rapoport & Riccardo Turati & Gonzague Vannoorenberghe, 2022. "Populism and the Skill-Content of Globalization: Evidence from the Last 60 Years," CESifo Working Paper Series 10068, CESifo.
    4. Albanese, Giuseppe & Barone, Guglielmo & de Blasio, Guido, 2022. "Populist voting and losers’ discontent: Does redistribution matter?," European Economic Review, Elsevier, vol. 141(C).
    5. Sergei Guriev & Elias Papaioannou, 2022. "The Political Economy of Populism," Journal of Economic Literature, American Economic Association, vol. 60(3), pages 753-832, September.
    6. D’Ambrosio, Anna & Leombruni, Roberto & Razzolini, Tiziano, 2021. ""Fear Is the Path to the Dark Side". Electoral Results and the Workplace Safety of Immigrants," IZA Discussion Papers 14322, Institute of Labor Economics (IZA).
    7. Crescenzi, Riccardo & Di Cataldo, Marco & Giua, Mara, 2020. "It’s not about the money. EU funds, local opportunities, and Euroscepticism," Regional Science and Urban Economics, Elsevier, vol. 84(C).
    8. Fremerey, Melinda & Hörnig, Lukas & Schaffner, Sandra, 2024. "Becoming neighbors with refugees and voting for the far-right? The impact of refugee inflows at the small-scale level," Labour Economics, Elsevier, vol. 86(C).
    9. Luisa Doerr & Niklas Potrafke & Felix Roesel & Luisa Dörr, 2021. "Populists in Power," CESifo Working Paper Series 9336, CESifo.
    10. Fornaro, Paolo & Kaihovaara, Antti, 2020. "Microdynamics, granularity and populism: The Finnish case," European Journal of Political Economy, Elsevier, vol. 65(C).
    11. Arnstein Aassve & Gianmarco Daniele & Marco Le Moglie, 2018. "Never Forget the First Time: The Persistent Effects of Corruption and the Rise of Populism in Italy," BAFFI CAREFIN Working Papers 1896, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    12. Riccardo Crescenzi & Marco Di Cotaldo & Mara Guia, 2019. "It’s not about the money! EU funds, local opportunities, and the Brexit vote," LEQS – LSE 'Europe in Question' Discussion Paper Series 149, European Institute, LSE.
    13. Chen, Shuai, 2020. "Unemployment, Immigration, and Populism: Evidence from Two Quasi-Natural Experiments in the United States," GLO Discussion Paper Series 652, Global Labor Organization (GLO).
    14. Snower, Dennis J. & Bosworth, Steven J., 2021. "Economic, social and political fragmentation: Linking knowledge-biased growth, identity, populism and protectionism," European Journal of Political Economy, Elsevier, vol. 67(C).
    15. Győző Gyöngyösi & Emil Verner, 2022. "Financial Crisis, Creditor‐Debtor Conflict, and Populism," Journal of Finance, American Finance Association, vol. 77(4), pages 2471-2523, August.
    16. Andreas Dür & Christoph Moser & Gabriele Spilker, 2020. "The political economy of the European Union," The Review of International Organizations, Springer, vol. 15(3), pages 561-572, July.
    17. Andrés Rodríguez-Pose & Neil Lee & Cornelius Lipp, 2021. "Golfing with Trump. Social capital, decline, inequality, and the rise of populism in the US," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 14(3), pages 457-481.
    18. Cerqua, A. & Ferrante, C. & Letta, M., 2021. "Electoral Earthquake: Natural Disasters and the Geography of Discontent," GLO Discussion Paper Series 790, Global Labor Organization (GLO).
    19. Moriconi, Simone & Peri, Giovanni & Turati, Riccardo, 2022. "Skill of the immigrants and vote of the natives: Immigration and nationalism in European elections 2007–2016," European Economic Review, Elsevier, vol. 141(C).
    20. Anthony Edo & Yvonne Giesing, 2020. "Has Immigration Contributed to the Rise of Rightwing Extremist Parties in Europe?," EconPol Policy Reports 23, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

    More about this item

    Keywords

    Populism; political parties; trade; immigration; shocks;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • H40 - Public Economics - - Publicly Provided Goods - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mtu:wpaper:21_09. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Maxine Watene (email available below). General contact details of provider: https://edirc.repec.org/data/motuenz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.