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Rara Avis: Latin American populism in the 21st century

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  • Campos, Luciano
  • Casas, Agustín
Abstract
Since the beginning of the 21st century, many Latin American countries have been ruled by governments characterized as populist (the so-called new Latin American Left). We focus on the macroeconomic implications of the policies adopted by these governments (instead of their leaders’ rhetoric) and we investigate to what extent this characterization holds. In particular, we focus on their wage policies by doing a Structural Vector Autoregressive analysis and assuming that populist shocks have no long-run effects on real wages. This identification implies that populist leaders prioritize redistribution through nominal wages disregarding the evolution of productivity. The results indicate that economic populism is not as widespread as previously thought. Instead, our approach leads to more nuanced results: while we find that there is populism in Argentina, the results for Brazil, Bolivia and Ecuador show only sporadic populist events. In the remaining countries, we do not find persistent economic populism.

Suggested Citation

  • Campos, Luciano & Casas, Agustín, 2021. "Rara Avis: Latin American populism in the 21st century," European Journal of Political Economy, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:poleco:v:70:y:2021:i:c:s0176268021000422
    DOI: 10.1016/j.ejpoleco.2021.102042
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    Cited by:

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    More about this item

    Keywords

    Macroeconomics of populism; Income redistribution; Structural VAR; Latin America;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • N36 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Latin America; Caribbean

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