The political economy of populism in Europe

Populist challengers to the political establishment have emerged across Europe in recent years, with both right-wing and left-wing movements and parties gaining traction. Many theories have been put forward to explain the phenomenon, given the significant impact of populism on European electoral politics, yet these often fail to account for the heterogeneity of populism. Why, for example, does right-wing populism sometimes emerge in contexts in which many would expect left-wing protest to resonate?

This paper presents a theory of populism that can accommodate such contradictions. It treats populism as a reaction to the distributional conflicts resulting from ‘hyperglobalization’, and connects its drivers to specific economic and political contexts. Among other factors, it finds that different types of populist protest tend to develop depending on whether the shocks from hyperglobalization are primarily to trade or financial markets, or manifest primarily as sudden increases in immigration.

The paper also makes clear that there is no single policy solution to address the causes of populist protest throughout Europe. Ignoring this fact at the level of EU policy formation risks reinforcing, rather than solving, the conflicts and societal tensions that arise around the issue.