The Rise of Populism and Italy's Electoral 'Tsunami'

Rawi  Abdelal; Dante  Roscini; Elena  Corsi

Case | HBS Case Collection | November 2018 (Revised June 2019)

The Rise of Populism and Italy's Electoral 'Tsunami'

by Rawi Abdelal, Dante Roscini and Elena Corsi

Abstract

Italy’s March 2018 elections led to a populist government that included the right-wing League and the anti-establishment 5 Star Movement. To respect their electoral promises, the two parties came up with a budget plan that provided for a public deficit at 2.4%, a figure higher than what the previous administration had promised the EU Commission. On October 23, 2018, the EU Commission rejected the plan asking Italy to revise downwards the public deficit. The same day, Italian bond yields spoke to 4-year highs, up to 3.7% as investors questioned Italy’s capacity to repay its public long-term debt, the second highest in the EU. Would the Italian government be able to implement its plan?

Keywords: globalized economies; unemployment; extremism; Political Elections; Immigration; Poverty; Social Issues; Government and Politics; Financial Condition; Financial Markets; Italy;

Language: English

Format: Print

50 pages

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Citation:

Abdelal, Rawi, Dante Roscini, and Elena Corsi. "The Rise of Populism and Italy's Electoral 'Tsunami'." Harvard Business School Case 719-042, November 2018. (Revised June 2019.)

Working Paper | HBS Working Paper Series | 2020

Dignity, Inequality, and the Populist Backlash: Lessons from America and Europe for a Sustainable Globalization

Rawi Abdelal

The greatest challenge to the sustainability of our current era of globalization comes from within the United States. The United States is at the center of global system. No single country has played a larger role in creating—and then cheerleading for—this era of global capitalism than has the United States. Yet most Americans have come to reject globalization: according to some polls, as few as forty percent of U.S. citizens believe that globalization is a force for good. As developing countries around the world came enthusiastically to embrace globalization, global capitalism began to face its fiercest critics in the developed world.
What can be done to restore the legitimacy of global capitalism within a country that, perhaps paradoxically, continues to embrace its national model of capitalism? We must discern the lessons from the parts of the developed world where the backlash is also profound—France, for example—and where it has been more muted—such as Germany.
Resolving these challenges has taken on an even greater urgency in the midst of the SARS-CoV-2 pandemic. The American fiscal policy response has reproduced some of the American system’s inherent failings and allowed for the emergence of mass unemployment, while the German fiscal policy response has preserved both the stability of firms and employment patterns. Now more than ever we should examine how to cultivate the legitimacy of the system in the eyes of its citizens.

Keywords: globalization; Pandemics; populism; United States; Europe; France; Germany;

Citation:

Abdelal, Rawi. "Dignity, Inequality, and the Populist Backlash: Lessons from America and Europe for a Sustainable Globalization." Harvard Business School Working Paper, No. 20-123, June 2020. View Details

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