Analysis: Weaker economic results favor populists in elections

Prague – Weaker results of European economies last year may support electoral gains of populist parties in the upcoming European Parliament elections. The effect will be more pronounced in the Czech Republic and Hungary, where the impact of economic weakening, high inflation, and rising unemployment was stronger than the European average. This follows from an analysis by Cyrrus, which was presented to journalists today by its chief economist Viktor Hradil.

According to the analysis, the worsening economic situation against the long-term average in the last year before the elections is benefiting populist entities. Voters attribute responsibility for economic performance to current governments, even though their policies affect the economic situation with a several-year delay. The analysis labels those entities as populist whose representatives divide society into an elite seeking personal gain and “ordinary people,” whom these politicians promise to represent.

The European Union struggled last year with significantly higher inflation than usual and weaker Gross Domestic Product (GDP) growth. In the Czech Republic, this effect was stronger than the European average; moreover, it also recorded an increase in unemployment, which on the European average, on the contrary, fell. The analysis concludes that populist entities will gain on average 1.1 percentage points higher electoral gain in the EU than they would under normal economic conditions. Populist parties will benefit most from economic developments in Hungary, where they will gain an additional 5.8 percentage points, and least in Greece, where economic development was favorable and will deduct 2.3 percentage points from populists. In the Czech Republic, economic development will bring populist entities an additional 3.1 percentage points.

The analysis also states that long-term rule of populist entities has a negative impact on economic development. Compared to countries where systematic parties alternate in power, countries dominated by populists achieve a ten percent lower GDP over a 15-year horizon.