Demagogues and the Instability of Democracy

• In Event: Authoritarian Politics

Abstract

We investigate how the presence of demagogues can unravel the economy in the long-run. By catering to the short-run interests of myopic voters at the cost of their long-run interests, demagogues force even fully benevolent parties to under-invest to raise their chances of election, so that they can implement their benevolent policies. We show that the damaging effect of demagogues and their chances of success is higher in hard times. We provide evidence based on four American political movements: Democratic-Republicans of the Early Republic, Jacksonians, the People's Party and the Populist Movement of the late 19th century, and populist movements of the 1930s.

Authors

• Dan Bernhardt, University of Illinois at Urbana-Champaign

• Stefan Krasa, University of Illinois at Urbana-Champaign

• Mehdi Shadmehr, University of Calgary