Working Paper: NBER ID: w17306
Authors: Daron Acemoglu; Georgy Egorov; Konstantin Sonin
Abstract: When voters fear that politicians may have a right-wing bias or that they may be influenced or corrupted by the rich elite, signals of true left-wing conviction are valuable. As a consequence, even a moderate politician seeking reelection chooses "populist' policies - i.e., policies to the left of the median voter - as a way of signaling that he is not from the right. Truly right-wing politicians respond by choosing more moderate, or even left-of-center policies. This populist bias of policy is greater when the value of remaining in office is higher for the politician; when there is greater polarization between the policy preferences of the median voter and right-wing politicians; when politicians are indeed more likely to have a hidden right-wing agenda; when there is an intermediate amount of noise in the information that voters receive; when politicians are more forward-looking; and when there is greater uncertainty about the type of the incumbent. We show that similar results apply when some politicians can be corrupted or influenced through other non-electoral means by the rich elite. We also show that 'soft term limits' may exacerbate, rather than reduce, the populist bias of policies.
Keywords: Populism; Political Economy; Elections
JEL Codes: C71; D71; D74
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| moderate politicians (D72) | populist policies (D72) |
| right-wing politicians (D72) | left-leaning policies (P35) |
| reelection incentives (D72) | populist bias (D72) |
| polarization (C46) | populist bias (D72) |
| noise in voter information (K16) | populist bias (D72) |
| soft term limits (K16) | populist bias (D72) |