Monday, December 16, 2019

It's the Long-Term Economic Decline, Stupid!

In light of the UK election results, this seems like a good time a flag a major piece of research by three European economists that is quite compelling and maps very well indeed onto the election results.
Their summary:
"Support for Eurosceptic parties has soared in parallel with the rapid rise of the populist wave currently engulfing Europe. Discontent with the EU is purportedly driven by the very factors behind the surge of populism: differences in age, wealth, education, or economic and demographic trajectories. New research mapping the geography of discontent across more than 63,000 electoral districts in the EU challenges this view. It shows that the rise of the anti-EU vote is mainly the consequence of long- to medium-term local economic and industrial decline in combination with lower employment and a less educated workforce....
[I]t is long-term economic and industrial decline that emerge as two fundamental drivers of the anti-EU vote. As indicated by Gordon (2018), it has been long forecast that persistent territorial inequalities could lead to major political breakdown. But more than the gap between rich and poor regions, the long-term economic and industrial trajectory of places makes the difference for the anti-system vote. Corroborating the theory of ‘places that don’t matter’ (Rodríguez-Pose 2018), the long-term decline of areas that saw better times – often with a grander industrial past – combined with the economic stagnation of places hitting a middle-income trap, provide fertile breeding grounds for the brewing of anti-system and anti-European integration sentiments."
Their solution:
"Many governments and mainstream parties seem to be at a loss as to how they should react to this phenomenon. Our research offers some initial suggestions about how to address the issue. If Europe is to combat the growing geography of EU discontent, fixing the so-called ‘places that don’t matter’ is one of the best ways to start. Responding to this emerging geography of EU discontent requires addressing the territorial distress felt by places that have been left behind, and promoting policies that do not merely target, as is common, either well-developed large cities or the least developed regions. Viable development intervention designed to address long-term trajectories of low-, no-, or negative-growth regions and provide solutions for places suffering from industrial decline and brain drain is urgently needed. Moreover, policies must go beyond simple compensatory and/or appeasement measures, which will require tapping into the often overlooked economic potential of these places and providing real opportunities to tackle neglect and decline."
Among other things, Corbyn and co. clearly did not convince the relevant populations in these areas that they had viable strategies to reverse ongoing decline and make "places that don't matter" matter. So the voters went elsewhere.
VOXEU.ORG
Support for Eurosceptic parties and the rise of populism threaten not only European integration, but peace and prosperity on the continent more broadly. Rather than attributing their rise to the individual characteristics of voters – such as age or income – this column takes a different approach...

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