Taking back control over the economy: From economic populism to the economic consequences of populism

Abstract

Economic populism was once recognized as a paradigmatic understanding of the boom-and-bust cycles of Latin America. By now, the concept has lost its analytical strength and academic attractiveness. Nevertheless, policy analysts cannot neglect the supply side analysis of contemporary populism, that is, what populists actually do once elected into government. Adopting and operationalizing the ideational definition of populism, the article identifies three major consequences of populist incumbency: (1) the inclination of populists to embark on redistributive policies favoring “our” people against “others,” (2) their critical attitude toward autonomous organizations, professionals, and institutions, and (3) their antagonistic relationship with the competitive market mechanism. The article demonstrates that populism is no longer about myopic and irresponsible policies; instead, populists tend to disregard the institutional constraints of economic decision making.