The Political Consequences of Household Wealth Shocks

• In Event: The International Political Economy of Money and Credit

Abstract

How do adverse shocks to household wealth influence domestic politics? Household wealth has become increasingly salient because rising financialization and trends in the cost and provision of crucial services have increased risks to many households. Wealth shocks can undermine support for mainstream political parties that have converged on policies perceived as contributing to the shock, compounding rising anxiety in the squeezed middle class and increasing the attractiveness of anti-system voting. Empirically, we leverage fine-grained data on household wealth portfolios in Italy to identify voters with greater exposure to these shocks. We then analyze electoral data in Italy since 1990 to examine the extent to which more exposed voters were likely to abandon mainstream political parties in favour of anti-establishment populist parties.

Authors

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

• Jeffrey M. Chwieroth, London School of Economics

• Jonathan Hopkin, London School of Economics

• Giovanni Francesco Angioni, London School of Economics and Political Science