How does Economic Populism Work? Warwick’s Dr. Herrera at WES2018

Speaking at the Warwick Economics Summit 2018, Warwick’s Associate Professor Dr. Helios Herrera, elucidates an original perspective on the exhausted query over why populist politicians have become so popular in Europe.

Many electorates in Europe believe populist governments are the “magic pill” to their problems…

Dr. Herrera, coordinator of the Political Economy and Public Economics Warwick Research Group and previously a lecturer at HEC Montréal and Columbia University’s School of International and Public affairs, gave an insightful exposition of his research (carried out alongside Luigi Guiso, Massimo Morelli and Tommaso Sonno) into economic populism.

With populist political leadership in Austria, Bosnia, Bulgaria, the Czech Republic, Hungary, Poland, Serbia, Slovakia, and the Swiss Federal Council, many electorates in Europe believe populist governments are the “magic pill” to their problems. It seems topical, then, for Dr. Herrera to have begun by clarifying what populism is – what is the magic pill?

It turns out, the magic pill is a well-marketed placebo. Populist leaders, Herrera explains, are guilty of; rhetoric claiming to promote the people’s interests versus those of the elites, pandering to people’s fears – “talking to their bellies” as the Associate Professor stated – and concealing the long term consequences of their proposed short-term solutions.

Populism is a reaction to a political crisis. This ‘medicine’ populists are proposing can be much worse than the crisis…

Dr. Herrera emphasises that “populism is a reaction to a political crisis. This ‘medicine’ populists are proposing can be much worse than the crisis”. The key point Dr. Herrera underlines regarding this crisis is that it is the product of globalisation, mass migration, automation and the economic crisis of 2008. These phenomena have been poorly received by the European electorate and poorly managed by their leaders in the past decade, resulting in economic insecurity.

Unlike Europe, China, the ‘unlikely’ “new leader of the free world” as Dr. Herrera suggests (probably in light of Xi Jinping’s remarks at Davos just last week), embrace globalisation and automation as a wholly positive development.

Millennials are abstaining” he says, concluding that “it’s on you guys” to change the trend…

As the most powerful driving force for distrust in traditional politics and in most cases anti-immigration sentiments, economic insecurity fuels populism’s rise in Europe.

In closing his address, Dr. Herrera points back to one of his findings which has been given little attention in mainstream media: populist politicians don’t only attract votes with their rhetoric. Very importantly, they dissuade people who align with more traditional parties from voting at all by reinforcing the conception that these politicians have let them down. “Millennials are abstaining” he says, concluding that “it’s on you guys” to change the trend.

Read more about Dr. Herrera’s research.

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