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    Trade Liberalization and the Rise of Populism in Brazil

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    Date
    2020
    Author
    Iacoella, Francesco
    Justino, Patricia
    Martorano, Bruno
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    Impact
    Abstract
    This paper investigates the long-term impact of economic shocks on populism, by exploiting a natural experiment created by the trade liberalization process implemented in Brazil between 1990 and 1995. This high impact and low duration event generated a profound shock to the economy with, we argue, long term implications for political outcomes. We focus on the 2002 and 2018 presidential elections in Brazil, which resulted in the election of a left-wing and a right-wing populist president, respectively. The results show that trade reforms explain the rise of populism in Brazil during the last two decades. Microregions with larger tariff cuts in the early 1990s had significantly higher preferences for Lula in 2002 and were also more likely to support Bolsonaro in 2018. The link between trade liberalization and populism is mediated by austerity in both cases. The shift between left-wing and right-wing preferences is driven by the supply side of populism, whereby each leader took advantage of existing cleavages in the country at the time of their election—driven by inequality in the case of Lula and by insecurity and corruption in the case of Bolsonaro—to develop narratives against austerity that would appeal to their target audiences.
    URI
    https://opendocs.ids.ac.uk/opendocs/handle/20.500.12413/15696
    Citation
    Iacoella, F.; Justino, P. and Martorano, B. (2020) Trade Liberalization and the Rise of Populism in Brazil, WIDER Working Paper 118/2020, Helsinki: UNU-WIDER
    DOI
    10.35188/UNU-WIDER/2020/875-7
    Is part of series
    WIDER Working Paper;118/2020
    More details
    https://www.wider.unu.edu/publication/roots-dissent
    Rights holder
    © UNU 2020
    Rights details
    https://www.ids.ac.uk/wp-content/uploads/2018/12/IDSOpenDocsExternalDocuments.pdf
    Collections
    • Democracy, Civil Society, Citizenship and Governance [18]
    • IDS Research [1599]

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