Financialization, Layering and Populism

• In Event: Credit Cycles, Inequality and Populism

Abstract

The rise of populism – a rejection of longstanding “mainstream” policies seen as chosen by and for other beneficiary groups – constitutes one of the most important recent developments in the global political economy. Analysis of these issues thus far has been largely confined to recent developments in Western Europe and the United States. Departing from this narrow focus, we utilize a new global dataset on populist candidates and parties that covers elections in 59 economies going back to 1980. We develop an argument that links long term trends in financialization to growing wealth cleavages that cut across mainstream party positions and generate disaffection among citizens losing ground in the distribution of wealth. We argue that this reinforces rising dissatisfaction among these groups with a broad set of policies – notably trade openness and financial crisis policy responses – that are perceived as having compounded declining socio-economic status. Our approach also explores how these long term “layering” effects can be distinguished from the cyclical fluctuations in income and employment at the centre of traditional economic voting models.

Authors

• Jeffrey M. Chwieroth, London School of Economics

• Andrew Walter, School of Social and Political Sciences, University of Melbourne