Higher sem "The Shadows of a Shattered Economy: How Persistent are Increases in Extremist Voting?”

Language: English

Abstract:

Economic shocks can trigger sharp increases in extremist voting. However, is the rise in extremist voting persistent over time or rather short-lived? I address this question by exploiting geographic variation in exposure to an economic crisis in interwar Germany while utilizing the exceptionally high number of federal elections during this period. I show that suffering from the economic collapse following the 1923 Ruhr Occupation caused a short-term six-percentage-point increase in left-wing extremist voting that largely vanished within eight months. This increase was offset by a reduction in far-right voting, resulting in a net zero effect on the overall extremist parties' vote share. I further do not find evidence that repeated exposure to economic shocks leads to a renewed overproportional increase (decrease) in the support of left-wing (right-wing) extremist parties. To counteract endogeneity problems, I rely on Synthetic Control Groups for statistical inferencing.