Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1182: Public Finance and Right-Wing Populism

Linuz Aggeborn () and Lovisa Persson ()
Additional contact information
Linuz Aggeborn: Department of Government, Postal: Uppsala University
Lovisa Persson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

Abstract: We build a public finance model that explains why voters vote for right-wing populists, and also under which conditions established politicians will adopt a right-wing populist policy platform. Voters with lower private income have a stronger demand for basic public services at the expense of spending on a global good; generosity of refugee support systems, foreign aid, and environmental protection. Low income voters are thus more prone to support right-wing populists who oppose spending on such global goods. We conclude that established politicians that are challenged by right-wing populists will implement a policy with no global good spending if the relative cost of the global good is high enough. Additionally, adoption of right-wing populist policy is more likely when the economy is in a recession.

Keywords: Right-wing populism; Agency; Immigration

JEL-codes: D70; D72; H39

28 pages, October 5, 2017

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