Political parties promoting nationalism and fiscal responsibility always benefit electorally from a financial crisis, a German think tank has claimed. The think tank examined the results of more than 800 general elections in 20 advanced economies, documenting the rise of the right, dating back over the past 140 years.
The 2008 financial crisis sparked wave after wave of political uncertainty, as all across Europe and the wider world two party systems which had remained stable for decades wobbled and toppled. In Greece, the fallout led to the brief rise of the Golden Dawn party. In France, the National Front is on the rise and is making a serious play for the Presidency.
In the UK too, the crisis saw the downfall of the Labour party and its dramatic swing to the left, while the UK Independence Party (UKIP) rose to become a powerful voice in British politics, leaving the current Conservative government in a weak position.
All of these events have been seen before, following financial crisis after financial crisis, say the authors of a new paper released by Germany’s Centre for Economic Policy Research.
“After a crisis, voters seem to be particularly attracted to the political rhetoric of the extreme right, which often attributes blame to minorities or foreigners. On average, far-right parties increase their vote share by 30% after a financial crisis,” they said, adding: “Importantly, we do not observe similar political dynamics in normal recessions or after severe macroeconomic shocks that are not financial in nature.”
They point to results such as the Swedish Democrats doubling of their vote share from 2.9 percent in 2006 to 5.7 percent in 2010, while in the Netherlands, the Dutch Party for Freedom (PVV) similarly increased from 5.9 percent to 15.5 percent in 2010.
Closer to home, UKIP made steady gains from 2.2 percent in the 2005 election to 3.1 percent in 2010, a year in which the untried David Cameron became Prime Minister, then surged to 12.7 percent in last May’s election when, for many, the Conservatives proved not right wing enough.
The authors sadly undermine their own research, however, by allowing their personal biases to colour the results. The only left wing beneficiary of the phenomenon that they list is Syriza, who won power at the Greek elections by promising to deliver less austerity and lower debt payments.
“The electoral gains of far-right parties have been particularly pronounced after the global economic crises of the 1920s/1930s and after 2008,” the authors write. “In the interwar period, the most prominent cases are Italy and Germany.
“Mussolini’s fascist alliance benefited from the early 1920s banking crisis in Italy and the global recession after the end of World War I, earning 19.1% of the vote in 1921 and about 65% in 1925. In Germany, the Nazis won 18.3% of the vote in the 1930 elections, more than 30% in the two 1932 elections, and over 40% in the March 1933 elections, when the Great Depression had its strongest impact on Central Europe.
“However, during the 1930s far-right parties also had increased electoral success in Belgium (the Rexists and the Flemish National Union), Denmark (the National Socialist Workers’ Party), in Finland (Patriotic People’s Movement), in Spain (Falange) and in Switzerland (National Front).”
They offer no justification for decreeing two Nationalist Socialist Workers’ Parties (both Denmark’s and Germany’s) ‘right wing’.
Similarly, they take the view that political upheaval which results in right wing gains is necessarily a bad thing, concluding: “regulators and central bankers have a great responsibility in terms of the political stability of a country. Preventing financial crises also reduces the likelihood of political disaster”.