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Study: Austerity Policies Strengthen Extremist Parties, Mainly on the Right

Budget cuts reduce voter turnout and disperse political power among more parties, especially when left-wing parties lead the cuts, according to a new study from the University of Bonn and the research department of the central bank of Sweden | The research comes as extremist parties are being strengthened across Europe

נפתלי בנט, יאיר לפיד, בני גנץ ואביגדור ליברמן (צילום: יונתן סינדל / פלאש 90)
Former Prime Minister Naftali Bennet, Leader of the Opposition Yair Lapid, former Alternate Prime Minister Benny Gantz, and former Minister of Finance Avigdor Lieberman. (Photo: Yonatan Sindel/Flash 90)
By Gal Rakover

Economic austerity increases the electoral strength of extremist parties, particularly when center-left parties implement austerity policies, according to a study published last month by researchers from the University of Bonn, Germany and the research department of the central bank of Sweden. The researchers examined the political effects of public spending cuts in various European countries and found that austerity measures were associated with increased power for extremist parties, decreased voter turnout, and the dispersal of political power across more parties. On average, the power of a single party weakened as a result.

Extremist parties have gained influence in Europe over the past 15 years. One of the most pertinent examples comes from Germany, where the far-right Alternative for Germany party has gained popularity in polls and even won local elections last June. The party is known for its opposition to immigration and its call to restore German national pride. A senior member of the party spoke out against the Holocaust memorial in Berlin, saying, “Germans are the only people in the world who have planted a memorial of shame in the heart of their capital.”

Similar examples can be found in Greece, where the far-left party Syriza led a coalition from 2015 to 2019, and the neo-Nazi Golden Dawn party gained widespread support. In the Netherlands, the far-right Party for Freedom became the second-largest party between 2017 and 2021 and is currently the third-largest party. It has consistently received at least 10% of the votes since 2010.

The researchers identified that the rise of extremist parties coincided with a period of fiscal austerity. In the wake of the European debt crisis, several European countries implemented austerity measures to reduce public debt and prevent a similar crisis. The researchers conducted statistical analysis to examine the relationships between economic factors and political outcomes.

The results of the research are significant: a 1% reduction in regional public spending increases the strength of extremist parties by 3 percentage points. To put this in perspective, in Israeli general elections, 3% of the vote is equivalent to about 2.5 mandates. This effect is the result of an increase in the number of voters for extremist parties on one hand and a simultaneous decrease in voter turnout, which magnifies the relative value of each vote.

The most pronounced effects were observed in regional elections, but effects were also present in national elections and European Parliament elections, albeit to a lesser extent. Extremist parties benefited on both ends of the political spectrum, but right-wing parties experienced a much more significant electoral boost. Additionally, during economic downturns, the political results of austerity are more immediate, while during periods of growth, the effects are delayed.

One interesting finding relates to the political affiliation of the coalition implementing the budget cuts. When center-left governments implement austerity measures, the impact on extremist party voting is much stronger. In contrast, when center-right governments implement austerity, the impact is less statistically significant.

The most affected regions, where the increase in votes for extremist parties and the decrease in voter turnout were most pronounced, were peripheral and economically disadvantaged areas. This did not surprise the researchers, who conducted an additional examination of the regional economic effects of budget cuts. They found that fiscal austerity adversely affected economic activity, employment, consumption, investment, and wages. Furthermore, they found that by reducing wages, profits increased, benefiting wealthier households, while working-class households suffered. As a result, the researchers link the economic effects of austerity to its electoral consequences.

However, not all economic hardships greatly influence on voting. The article compares the effects of economic slowdowns that occur simultaneously with austerity measures to those that do not. When economic slowdowns do not coincide with austerity, their political impact is smaller. However, when austerity accompanies economic downturns, the political effect is more pronounced. The researchers demonstrate that voter trust in the government is severely affected during simultaneous economic hardship and austerity, whereas the impact is less pronounced when austerity is not accompanied by economic difficulties.

This article was translated from Hebrew by Leah Schwartz.

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