86th International Atlantic Economic Conference

October 11 - 14, 2018 | New York, USA

Political economy theories explaining the rise of national-populist parties in the European Union countries

Saturday, 13 October 2018: 9:20 AM
Ileana Tache, Ph.D. , Faculty of Economic Sciences, Transilvania University of Brasov, Brasov, Romania
Aiming at stimulating reflection on the rise of populist and ultra-nationalist parties which threaten European Union (EU) liberal and democratic principles, this paper tries to determine the relevance of different political economy theories for the present radical transformation of the European political landscape. Given the potential perils of war, destruction and insecurity generated by the contemporary national-populist movement, the paper investigates the causes and consequences of political radicalization. Examples of these causes are the global and economic financial crisis with the associated austerity policies, the refugee crisis, and the unclear economic placement of the radical-populist parties. The consequences are that political radicalization creates a sense of concern and an uncertain future for the EU project, it represents one of the most potent dangers of war, destruction and insecurity, and it can lead to a potential slippage towards dictatorship. Exploring factors that account for national-populist parties’ resurgence in the EU, the literature review reveals that different economic and non-economic aspects interact, explaining the surge of national-populist parties across the European Union.
In the context of the EU troubled political situation, wartime German nationalism and its terrible consequences should be remembered and analyzed through the lens of public choice theory.
Discussing some political economy theories (such as rational choice theory, Condorcet paradox of social choice theory, Arrow’s impossibility theorem, Coase's theorem, public choice theory with the median voter theorem, theories studying the relationship between political cycles and economic cycles – opportunistic or partisan models with rational expectations and the political economy of collective decisions and constitutional evolution) is useful to prove that they are a reliable guide for understanding the recent national-populist movements’ resurgence, even though there are many pressing challenges generated by a much more complicated global context.
The paper also presents, as case studies, the most prominent populist parties in the EU (such as the Freedom Party, National Front, Sweden Democrats, United Kingdom Independence Party (UKIP), Golden Dawn, Jobbik, Party for Freedom, and Alternative for Germany) extracting from their political agenda, the position towards the EU and the economic platforms. In the end, policy implications for the EU are derived, showing that a comprehensive strategy to tackle populism should be a priority of the EU agenda in the years to come.