The Political Consequences of Socio-Economic Inequality

The main value added of the dissertation the new theoretical framework and empirically proves the existence of an intermediary factor in-between socio-economic inequality and rise of populism, namely the institutions, both political and economic. While there is some empirical evidence showing the direct effect of economic insecurity and institutional trust on populism (e.g. Guiso et al. (2017), Dustmann et al. (2017)), this is the first study of its kind to show how the impact of economic insecurity on populism varies depending on the level of institutional trust. I find that when enlarging the definition of economic insecurity, institutional trust moderates populist voting of various socio-economic groups differently. When an individual is highly economically insecure, trust in national institutions does not alter the probability of voting for populist parties and populist voting remains generally high. They seem to represent the closest candidate to being the real “economic voters”. For them, when making a voting decision, trust in national government does not matter, and their economic situation is the main determinant: their experience with long-term unemployment, their less secure jobs and their limited ability of making ends meet is key to their voting decision. The results contribute to a better understanding of populism as well as institutional trust. Since the results show that the choices of both right and left-wing populist voters are driven by economic insecurity and moderated by a lack of trust in institutions, populism as ideological tool used by a variety of populist parties in the region seems to have the same root causes for support. In terms of institutional trust, the findings point to the significance of the proposition by Krueger et.al. (2021) to focus on swift trust in transient economic settings, which are especially important in the voting booth and might be structurally different from institutional trust on any other day or a different context. My results suggest that policy makers ...