To Respond to Citizens, Change the Model
Massimo Morelli has provided a detailed description of populism in Europe, using real data and surveys from 2002 on, in two papers co-authored with Luigi Guiso, Helios Herrera and Tommaso Sonno (Populism: Demand and Supply and Global Crisis and Populism: the Role of Eurozone Institutions). Industrial, financial and institutional crises have led to abstention from voting, mistrust, and the surge in support for populist parties. The widespread awareness of the shortcomings of liberal democracies added to individual fears and economic insecurity of workers exposed to globalization and immigration.
"You can either strengthen democracy by increasing political participation at the European level, or you give full control of the economic policy levers back to governments", professor Morelli says. "If there was a European unemployment aid, for instance, citizens would feel closer to supranational institutions". Democracy, much more than the euro, is at risk if populism is met with contempt or discredit, Morelli argues. The demand for protection is legitimate, a convincing economic response is necessary.
In Global Crisis and Populism, the authors show that globalization and financial crisis have struck the eurozone countries harder because of the greater difficulty of these countries' policymakers in responding to a shock with counter-cyclical policies and because of the tendency for multinational and national firms to relocate production from eurozone to European countries outside the eurozone. In the future, Morelli says, democracy will be different for other reasons too. Forms of direct democracy, such as those offered in Switzerland, will ward off populist tendencies, as technology will offer new channels for participation. "The model of liberal democracy based on free market and income redistribution must be changed. Democracy must identify new ways to respond to citizens' demands, not relying only on ex post redistribution, but implementing ex ante protections to counteract inequality and poverty".
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