Working Paper: NBER ID: w26333
Authors: Sebastian Edwards
Abstract: In this paper I discuss the ways in which populist experiments have evolved historically. Populists are charismatic leaders that use a fiery rhetoric to pitch the interests of “the people” against those of banks, large firms, multinational companies, the IMF, and immigrants. Populists implement redistributive policies that violate the basic laws of economics, and in particular budget constraints. Most populist experiments go through five distinct phases that span from euphoria to collapse. Historically, the vast majority of populist episodes end up with declines in national income. When everything is over, incomes of the poor and middle class tend to be lower than when the experiment was launched. I argue that many of the characteristics of traditional Latin American populism are present in more recent manifestations from around the globe.
Keywords: No keywords provided
JEL Codes: D71; D72; D74; D78; E52; E62; N16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| populist regimes (P16) | increased inflation (E31) |
| populist regimes (P16) | declines in national income (E25) |
| populist policies (D72) | lower incomes for the poor and middle class (D31) |
| populist policies (D72) | economic euphoria (E32) |
| economic euphoria (E32) | economic collapse (G01) |
| populist policies (D72) | inflationary pressures (E31) |
| IMF and austerity measures (F33) | emergence of populist regimes (P16) |
| populist policies (D72) | increased protectionism (F52) |
| populist policies (D72) | regulatory burdens (L51) |