Notice that in Fig. J Evol Econ 29(2):611630, Sanchez Carrera E (2016) Evolutionary games and poverty traps. J Eur Econ Assoc 10(1):78119, Colantone I, Stanig P (2018) The trade origins of economic nationalism: import competition and voting behavior in Western Europe. There is one asymptotically stable equilibrium, \(E_{10}\), which is stable when the wealth of the Rich is high enough, \({\bar{W}} \ge \frac{\alpha -\beta _{1}}{({\bar{\tau }}-\tau )}\); equality indicates that a trasncritical bifurcation occurs, i.e., \(E_{10}=E_B\). J Polit 71(1):178191, Gintis H (2009) Game theory evolving, 2nd edn. Italy leaves children of same-sex parents in limbo, How Australia wrote the 'stop the boats' playbook, Searching for my daughter-in-law in the mud, Floods, awards and jewels: Photos of the week. This scenario is the one with moderate levels of economic inequality, the Rich have a higher constant fear of immigrants and they lose little of their fear due to an increase of not supporting citizens. The BBC is not responsible for the content of external sites. The rise of populism in western politics has played a profound role in U.S. democracy. In the 19th century, the lower class rose up against the elites of society by selecting their own candidates who represented the needs of the silent majority. However, with privilege comes power, and populism has since spired out of control. Let us consider a first scenario characterized by low fear of immigrants and low economic inequality. European populism cannot be defeatedbut it can be contained. In evolutionary game theory, the varieties in question are strategies in a game. We propose that an economic society with a low inequality of wealth and with a low fear of immigrants is needed to avoid populism. 3.1 develops the replicator dynamics and it offers the dynamic equilibria and stability properties. This theory implies that the surfacing of populism is cyclical and it happens when economic growth is strong, since the loss of income due to autarky has less of an effect on the marginal utility of consumption during expansions. Vector field of system (7). The Republicans had failed 33, No. Our paper addresses these questions by building an evolutionary game with two groups of players that decide whether to support a populist party by weighting demand for redistribution and demand for tough policy against immigration. (2016) show that the vote for such parties spiked in elections held after systemic financial crises (in advanced economies between 1870 and 2014): support for extremist parties increased dramatically and especially for far-right parties (\(+30\%\)). What do Donald Trump, Jeremy Corbyn, and Rodrigo Duterte have in common? Inequality aversion, populism, and the backlash against globalization (No. Read about our approach to external linking. Proof of the Proposition on existence and stability of equilibrium points, The equilibrium points are the solutions of the ninth degree algebraic system of two equations, In particular, a unique interior equilibrium \(E_{*}=\left( x^{*},y^{*}\right) \), located at the unique intersection of the two lines (nullclines). What model of political choice may explain these facts? Indeed Gerber and Rogers (2009) explain that there is a growing literature on social norm perception and that people consider strongly what other people do in a given situation: beliefs about how other people act, called descriptive social norms, exert powerful influence across a range of behaviors. How do stable democracies with mild levels of economic and social problems suddenly see an important spike of preferences for populist parties? The share of \(NS-\)rich citizens is defined by \(\theta x \) and the share of \(S-\)rich citizens by \(\theta \left( 1-x \right) \), with half of each share changing strategy. In Latin America, there was Venezuela's late President Chvez. 2017 ): (i) the claim that it protects the people from the elite, (ii) the focus on demand-driven policymaking, and (iii) the disregard for future This paper takes a different stand: Why is right-wing and left-wing populism emerging now? \(E_{00}\) is stable under the condition: \(\alpha >{\bar{W}}({\bar{\tau }}-\tau )\), i.e., the constant fear of immigrants is large enough for the Rich group (Fig. As soon as one looks at richer income groups, however, growth rates are markedly higher, exceeding 100% for the top 1% and culminating at 200% for the top 0.001% of European citizens. Low to middle level of \(\alpha \) and \(\beta _1\;, \beta _2\), that is there is a middle to big positive marginal effect for fellow citizens supporting populism. The true populist leader claims to represent the unified "will of the people". Unemployment may also lead to the rise of populist movements, especially in regions which are quite poor and have a quite low living standard. If people in these regions become unemployed, they may no longer be able to provide for their families and may suffer from starvation. The intuition behind the stability condition for this equilibrium is that: i) the psychological benefits of supporting populism due to the fear of immigrants are low, ii) inequality is not high enough (in the following numerical simulations the condition for low inequality is represented by \({\bar{W}} = 1\)), and iii) the marginal effects, \(\beta _{1}+\beta _{2} \;\; \text {and} \;\; \sigma _{1}+\sigma _{2}\), on the psychological benefit of other not-supporting citizens is high. Georgiadou etal. 2023 Springer Nature Switzerland AG. Moreover, the report states, both in advanced and emerging economies wealth is significantly more unequally distributed than income, and the problem of economic inequality has improved little in recent years.Footnote 1 In this vein Han (2016) states that the average Gini coefficient of market (pre-tax, pre-transfer) income inequality in Western European countries increased by over 20% between 1980 and 2010 (the Standardized World Income Inequality Database, SWIID), and the average Gini coefficient of net (post-tax, post-transfer) income inequality increased by approximately 15% over the same period. Assume that: Wealth of an individual of class \(i=\{\ R, P\}\) is denoted by \(W_i>0\). The authors declare that there is no conflict of interest. Unemployment, immigration and income inequalities have significant and robust effects at the sub-regional level. Moreover, these policies can last even less for highly indebted countries such as Italy, Greece and Portugal. The straight blue line is \((1-x)x(-0.3+0.7x+0.5y)=0\), and the dashed blue line is \((1-y)y(-0.9 + 0.5 x +0.5y)=0\), i.e., the two nullclines (color figure online). 2022. had supported the Silver Purchase Act. Inequality and extremist voting: evidence from Germany, Di Tella R, Rotemberg JJ (2018) Populism and the return of the Paranoid Style: some evidence and a simple model of demand for incompetence as insurance against elite betrayal. In a setting where the US is compared to the Rest of the World and there are individual-level differences in risk aversion, economic growth increases inequality within both countries because less risk-averse agents consume a growing share of total output. 8. Robustness in the sense of amplitude of displacements from the equilibrium that are recovered by endogenous dynamics of the system, i.e., such that the spontaneous dynamics of the system will lead again to the equilibrium. The parameters defined by \(\sigma _1=0.7\), \(\sigma _2=0.7\), \(\beta _1=0.7\) and \(\beta _2=0.5\) (they may range also between \((0.6, \; 1))\), and \(\alpha =0.3\), \(\gamma =0.3\) (it holds also for values lower than 0.4). The first step to shed some light on its qualitative dynamic behavior is the study of the existence of equilibrium points: their localization (obtained by solving an algebraic system of degree 9) and their local stability properties. The dashed blue line is \((1-y)y(-0.5+0.4x+0.8y)=0\) (color figure online). The case in which the population does not support populism in the long run is represented by the equilibrium \(E_{11}\). Acemoglu etal. But there's a difference between being popular and being populist. (Stability of steady states) Given the existence of such equilibrium points (Proposition1), their local stability properties are as follows: The interior equilibrium \(E_{*}\) is always unstable; it is a saddle point if \(\beta _{1}\sigma _{1}<\beta _{2}\sigma _{2}\); it is a repelling node if \(\beta _{1}\sigma _{1}>\beta _{2}\sigma _{2}\). More specifically, using a multilevel analysis method, Han (2016) tests different hypotheses for how income inequality affects voter support for radical right-wing parties (RRPs) in Western Europe (these parties are defined as nationalist, but not anti-system parties). It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. They find evidence in support of both economic insecurity and cultural backlash theses (deriving from Inglehart and Norris 2016). Social-identity theory (Tajfel 1982) states that group members are motivated to conform with norms that provide them with an in-group identity. There is evidence that variables related to personal emotions are very important in order to understand votes for populist parties such as the Front Nationale of Marine Le Pen. For example, at \(\sigma _{2}=\gamma \) we have \(E_{R}=E_{10}\) and the if \(\gamma \) decreases then \(E_{R}\) exits the unit interval whereas \(E_{10} \) becomes unstable along the vertical axis. The third condition above implies that the marginal impact of a citizen that shift to not supporting populists is big enough in eroding the constant part of the fear of immigrants. Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Politiikka 61(1):3453, Autor D, Dorn D, Hanson GH (2016) The China shock: learning from labor-market adjustment to large changes in trade. "You might question how good that is for democracy," he added. The evidence indicates that while income inequality increases support among the poor for RRPs in Western Europe, it decreases support among rich people for these parties. The next section analyzes this game as an evolutionary process. Vector field of system (7). No player, therefore, has an incentive to deviate from the Nash outcome, since it is the best situation for each individual player. result. Annu Rev Polit Sci 19:477497, Guiso L, Herrera H, Morelli M, Sonno T (2017) Demand and supply of populism. Notice that citizens vote on perceptions of policies: despite international laws on immigration and refugees, we assume that common citizens tend to prefer the party that promises to flex more the muscles against this potential threat from a cultural and identity standpoint. Latin America, there was Venezuela 's late President Chvez neutral with regard to jurisdictional claims in maps... 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