PUBLICATION: Working Paper "Populist Leaders and the Economy"
Manuel Funke, Moritz Schularick and Christoph Trebesch; Kiel Working Papers / Kiel Institute for the World Economy
Manuel Funke, Moritz Schularick and Christoph Trebesch; Kiel Working Papers / Kiel Institute for the World Economy
Kiel Institute for the World Economy
Populism at the country level is at an all-time high, with more than 25% of nations currently governed by populists. How do economies perform under populist leaders? We build a new cross-country database identifying 50 populist presidents and prime ministers 1900-2018. We find that the economic cost of populism is high. After 15 years, GDP per capita is more than 10% lower compared to a plausible non-populist counterfactual. Rising economic nationalism and protectionism, unsustainable macroeconomic policies, and institutional decay under populist rule do lasting damage to the economy.