On Latin American Populism, And Its Echoes Around the World
In this paper I discuss the ways in which populist experiments have evolved historically. Populists are charismatic leaders that use a fiery rhetoric to pitch the interests of “the people” against those of banks, large firms, multinational companies, the IMF, and immigrants. Populists implement redistributive policies that violate the basic laws of economics, and in particular budget constraints. Most populist experiments go through five distinct phases that span from euphoria to collapse. Historically, the vast majority of populist episodes end up with declines in national income. When everything is over, incomes of the poor and middle class tend to be lower than when the experiment was launched. I argue that many of the characteristics of traditional Latin American populism are present in more recent manifestations from around the globe.
I thank Al Harberger, Doug Irwin, Ed Leamer, Alejandra Cox, José De Gregorio, Leonidas Montes, and Fernando Losada for helpful discussions and comments. Luis Cabezas provided able assistance. I am grateful to three editors for extremely useful comments. This paper is dedicated to the memory of Rudi Dornbusch. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Sebastian Edwards, 2019. "On Latin American Populism, and Its Echoes around the World," Journal of Economic Perspectives, vol 33(4), pages 76-99.