Populism and Income Inequality
How income inequality creates the preconditions for populism to grow
A new wave of populism is disrupting the politics of the entire European continent, with unpre- dictable consequences for the future of the European Union. What explains such a phenomenon? What explains its rise? By looking at the evidence of an increased concentration of income in the hands of a small group of favoured individuals, this thesis examines the hypothesis that income inequality is a fundamental contributor to rising populism. First, I analyse the relationship be- tween inequality and voting behaviour. Inequality aects directly voting decision by destabilizing and polarizing politics, aecting the loyalty of individuals to traditional parties, and creating a sentiment of envy towards the elite. At the same time, inequality impacts indirectly the electorate through those factors from which inequality is aected, meaning globalization and technological change. Second I evaluate the relationship between populism and income inequality, nding that income inequality eects populism positively. The estimated elasticity of populism on income inequality is signicant and robust, value adjusted including a number of standard socio-economic and political variables. This result supports my main hypothesis.