Socio-Economic Inequality and Populism: A Theoretical Framework of Analysis

Abstract

The literature connecting growing socio-economic inequality and populism as the main political consequence of it, is burgeoning. However, modern studies are often limited to one-directional models that are based on the available data and are often operationalized on a limited number of variables. This article provides an in-depth literature review of elements of socio-economic inequality and populism, as well as introduces a new conceptual framework to provide pointers for qualitative or qualitative applications. In terms of independent variables, the framework decomposes the multilayered concept of socio-economic inequality into inequality of income (insecurity, polarization and perception) and wealth (via its link to rent-seeking and state capture) as well as inequality of opportunity (circumstances and effort, perception of opportunity). The main dependent variables that define populism are attitudes and voting on the demand side of populism, as well as party strategy and policies on the supply side, with the latter having the potential for a reverse causality. The most important innovation of the theoretical model is the incorporation of the institutional filters as mediating variables and their influence on the impact of inequality on populism. When economic and political institutions do not function well or citizens do not evaluate them positively, it has a potential to further exacerbate the economic grievances and amplify the support of populism. The proposed theoretical framework is particularly useful for case study and large N research designs focusing on Central and Eastern Europe, as besides the role of institutions, it incorporates the literature on rents.