Is this the end of populism in Europe?

by Luigi Guiso, Helios Herrera and Massimo Morelli

Vox
January 25, 2012

What good might come from Europe’s crisis? Profligate governments in Italy and Greece, while pandering to the masses, have left their countries with crippling debt. This column draws parallels with Latin America and argues that the current hardship may sound a death knell for populism in southern Europe, as it has elsewhere.

The collapse of Silvio Berlusconi’s government in November 2011 leaves us relieved, even if it was after a protracted ‘death scene’ that brought Italy and the Eurozone to the very edge. Now questions arise:

• How did such a populist government succeed in a western European democracy like Italy?
• What are the economic costs of populism and how do they manifest themselves?

To answer these questions, a comparative look at Latin America can be illuminating, since populism has been more pervasive in that part of the world than anywhere else.

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