IDEAS home Printed from https://ideas.repec.org/p/rco/dpaper/511.html

Losing the Country: Debt, Deflation, and the Rural Rise of the Nazi Party

Author

Listed:
  • Thilo Nils Hendrik Albers

    (HU Berlin)

  • Felix Kersting

    (HU Berlin)

  • Monique Reiske

    (HU Berlin)

Abstract

Using interwar German agriculture as a case, this paper explores the political cost of debt deflation which we characterize with farmers' leverage ratios. Primary deficits drove their increase during 1924-1928, but deflation pushed them to unsustainable levels during 1929-1932. We construct corresponding exogenous county-level exposure measures and show their effect on economic distress as well as political radicalization. Our results suggest that debt deflation increased the Nazi party's rural vote share by over 8 percentage points relative to a counterfactual baseline scenario and was thus a necessary condition for its rural dominance and ascension to parliamentary power.

Suggested Citation

  • Thilo Nils Hendrik Albers & Felix Kersting & Monique Reiske, 2024. "Losing the Country: Debt, Deflation, and the Rural Rise of the Nazi Party," Rationality and Competition Discussion Paper Series 511, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:511
    as

    Download full text from publisher

    File URL: https://rationality-and-competition.de/wp-content/uploads/discussion_paper/511.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. King, Gary & Rosen, Ori & Tanner, Martin & Wagner, Alexander F., 2008. "Ordinary Economic Voting Behavior in the Extraordinary Election of Adolf Hitler," The Journal of Economic History, Cambridge University Press, vol. 68(4), pages 951-996, December.
    Full references (including those not matched with items on IDEAS)

    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. Bühler, Mathias & Sabet, Navid, 2026. "Female enfranchisement and the conservative voting gap: Evidence from gender-separated precinct returns," European Journal of Political Economy, Elsevier, vol. 93(C).
    2. Joachim Voth, 2013. "Tightening Tensions: Fiscal Policy and Civil Unrest in South America, 1937–95," Central Banking, Analysis, and Economic Policies Book Series, in: Luis Felipe Céspedes & Jordi Galí (ed.),Fiscal Policy and Macroeconomic Performance, edition 1, volume 17, chapter 3, pages 59-92, Central Bank of Chile.
    3. Sebastian Doerr & Stefan Gissler & José-Luis Peydró & Hans-Joachim Voth, 2018. "From finance to fascism," Economics Working Papers 1651, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2020.
    4. Maja Adena & Ruben Enikolopov & Maria Petrova & Veronica Santarosa & Ekaterina Zhuravskaya, 2015. "Radio and the Rise of The Nazis in Prewar Germany," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1885-1939.
    5. Arnaud Chevalier & Benjamin Elsner & Andreas Lichter & Nico Pestel, 2018. "Immigrant Voters, Taxation and the Size of the Welfare State," SOEPpapers on Multidisciplinary Panel Data Research 994, DIW Berlin, The German Socio-Economic Panel (SOEP).
    6. Miguel Almunia & Agustín Bénétrix & Barry Eichengreen & Kevin H. O’Rourke & Gisela Rua, 2010. "From Great Depression to Great Credit Crisis: similarities, differences and lessons [Germany: Guns, butter, and economic miracles]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 25(62), pages 219-265.
    7. Nico Voigtländer & Hans-Joachim Voth, 2012. "Persecution Perpetuated: The Medieval Origins of Anti-Semitic Violence in Nazi Germany," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1339-1392.
    8. de Bromhead, Alan & Fernihough, Alan & Hargaden, Enda, 2020. "Representation of the People: Franchise Extension and the “Sinn Féin Election” in Ireland, 1918," The Journal of Economic History, Cambridge University Press, vol. 80(3), pages 886-925, September.
    9. 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.
    10. Maurer, Stephan E., 2018. "Voting Behavior and Public Employment in Nazi Germany," The Journal of Economic History, Cambridge University Press, vol. 78(1), pages 1-39, March.
    11. Mark Harrison, 2016. "Myths of the Great War," Studies in Economic History, in: Jari Eloranta & Eric Golson & Andrei Markevich & Nikolaus Wolf (ed.), Economic History of Warfare and State Formation, pages 135-158, Springer.
    12. Bauernschuster, Stefan & Blum, Matthias & Hornung, Erik & Koenig, Christoph, 2025. "The political effects of the 1918 influenza pandemic in Weimar Germany," Explorations in Economic History, Elsevier, vol. 96(C).
    13. repec:osf:osfxxx:2jgq8_v1 is not listed on IDEAS
    14. Galofré-Vilà, Gregori, 2023. "Spoils of War: The Political Legacy of the German hyperinflation," Explorations in Economic History, Elsevier, vol. 88(C).
    15. Nico Voigtländer & Hans-Joachim Voth, 2026. "Highway to Hitler," American Economic Journal: Applied Economics, American Economic Association, vol. 18(1), pages 120-159, January.
    16. repec:ehl:lserod:44335 is not listed on IDEAS
    17. Alan de Bromhead & Kevin Hjortshøj O'Rourke, 2024. "Should history change the way we think about populism?," Economic History Review, Economic History Society, vol. 77(3), pages 1086-1109, August.
    18. Hager, Anselm & Hennicke, Moritz & Krause, Werner & Mergele, Lukas, 2021. "Privatizations Spark Socialist Backlash: Evidence from East Germany’s Transformation," OSF Preprints cmsyn, Center for Open Science.
    19. Doerr, Sebastian & Gissler, Stefan & Peydro, Jose-Luis & Voth, Hans-Joachim, 2018. "Financial crises and political radicalization: How failing banks paved Hitler's path to power," CEPR Discussion Papers 12806, Centre for Economic Policy Research.
    20. Berg, Heléne & Dahlberg, Matz & Vernby, Kåre, 2016. "Post-WWI Military Disarmament and Interwar Fascism: Evidence from Sweden," Working Paper Series 2016:16, Uppsala University, Department of Economics.
    21. Andreas Lichter & Max Löffler & Sebastian Siegloch, 2021. "The Long-Term Costs of Government Surveillance: Insights from Stasi Spying in East Germany," Journal of the European Economic Association, European Economic Association, vol. 19(2), pages 741-789.
    22. Steve Sauerwald & J. (Hans) Van Oosterhout & Marc Van Essen, 2016. "Expressive Shareholder Democracy: A Multilevel Study of Shareholder Dissent in 15 Western European Countries," Journal of Management Studies, Wiley Blackwell, vol. 53(4), pages 520-551, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-

    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:rco:dpaper:511. 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: Viviana Lalli (email available below). General contact details of provider: https://rationality-and-competition.de .

    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.