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The European trust crisis and the rise of populism

Subject

Economics

Publishing details

CEPR Discussion Paper

Authors / Editors

Algan Y;Guriev S;Papaioannou E;Passari E

Biographies

Elias Papaioannou

Publication Year

2017

Abstract

We study the implications of the Great Recession for voting for anti-establishment parties, as well as for general trust and political attitudes, using regional data across Europe. We find a strong relationship between increases in unemployment and voting for non-mainstream, especially populist parties. Moreover, increases in unemployment go in tandem with a decline in trust in national and European political institutions, while we find much attenuated effects of unemployment on interpersonal trust. The correlation between unemployment and attitudes towards immigrants is muted, especially for their cultural impact. To advance on causality, we extract the component of increases in unemployment explained by the pre-crisis structure of the economy, in particular the share of construction in regional value added, which is strongly related both to build-up and the burst of the crisis. Our results imply that crisis-driven economic insecurity is a substantial driver of populism and political distrust.

Series Number

DP12444

Series

CEPR Discussion Paper

Available on ECCH

No

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