04.05.2025

The Politics of Pessimism: Unfunded Public Goods as a Source of Right-Wing Populism

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A major debate in political economy concerns whether right-wing populism is driven primarily by economic or cultural factors. This debate has proved challenging to resolve, because culture and economics covary. 

The economic shock induced by business lockdown policies during the COVID-19 pandemic can be used to isolate the impact of economic motivations. While lockdowns protected public health, they also imposed severe economic hardship, disproportionately affecting workers without college degrees. 

This study argues that in the U.S., those most exposed to the economic costs of lockdowns were more likely to shift support towards a populist president. Using a staggered difference-in-differences event study approach, we estimate the effect of state lockdowns on support for Donald Trump, finding a significant increase in Trump approval in states with high risk of downsizing. Our findings illustrate how right-wing populism can rise when the pursuit of “unfunded public goods”–such as public health, environmental sustainability, new technologies—has concentrated and uncompensated costs.

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