Austerity, Turnout and Populism : The Case of Local Fiscal Rules

We study the causal effects of austerity measures in the form of local fiscal rules on political participation and party preferences. We exploit an Italian reform - namely, the 2013 imposition of deficit targets in municipalities with fewer than 5,000 residents - to show that local fiscal rules lead to greater turnout in national elections, by increasing the perceived efficacy of politicians elected at higher tiers of government. Building on this finding, we ask whether policy restrictions contribute to populist voting. We find that fiscal rules led to what we term a "within-populist redistribution of support" - with Italy's largest right-wing populist party, the Eurosceptic Northern League, gaining ground at the expense of its populist competitor, the Five Star Movement. These results contribute to our understanding of which type of populist discourse proliferates under austerity