Economic interests are assumed to be the leading driver of political preferences, and various empirical studies have examined how economic conditions affect political views and voting behavior. Meanwhile, populism is on the rise in European Union (EU) member countries. Against that backdrop, this paper aims to examine the effect of economic uncertainty on populist voting behavior based on a panel dataset of 24 EU countries from 1980 to 2020. We focus on whether total populist, right-wing populist, and left-wing populist votes are affected by a new indicator of economic uncertainty, namely, the World Uncertainty Index (WUI). Relying on a fixed-effects, bias-corrected least squares dummy variable estimator and instrumental variable estimations, we show that a higher WUI increases total populism and right-wing populist voting behavior. The baseline results remain consistent when dealing with potential issues of endogeneity and reverse causality, addressing omitted variable bias, and excluding outliers.
Supplementary information: The online version contains supplementary material available at 10.1007/s11127-021-00933-7.
Keywords: Economic policy uncertainty; Economic uncertainty shocks; Left-wing populism; Populist attitudes in the European Union; Right-wing populism; Voting behavior.
© The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2021.