Working Paper: CEPR ID: DP18382
Authors: Emmanuelle Auriol; Nicolas Bonneton; Mattias Polborn
Abstract: This paper presents a rational theory of populism using a moral hazard model of policymaking, and shows that rational voters may support populists despite their lack of competence. Our model features an incumbent elite politician who is both office-motivated and policy-motivated, and has policy preferences that deviate from voters' preferences in some states of the world. The voters' problem is to motivate the better informed incumbent to implement their preferred policy. The optimal retention strategy depends on the policy implemented by the incumbent in the previous period and its perceived success, and involves differentiated punishment for a failing incumbent, by electing either another elite politician or a populist. Our analysis provides insight into how political complexity, establishment party polarization, fake news, and politician pay are linked to the populist vote.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| populism (D72) | elite politicians' behavior (D73) |
| voters' retention strategies (K16) | elite politicians' behavior (D73) |
| perceived success of the incumbent's policy (E65) | voters' retention strategies (K16) |
| incumbent's failure to implement policies (D78) | voters choosing to elect a populist (D72) |
| threat of political alternation (D72) | elite politicians' behavior (D73) |
| populist support (D72) | better behavior from incumbents (G34) |