The economic consequences of durable left-populist regimes in Latin America
Date of Publication
2020 12:00 AM
Security Theme
Economic Stability
Keywords
Economic Stability, srhreports, economicstability, economic performance, infant mortality, inequality, synthetic control, Latin America, populism, checks & balances, economic stability, Venezuela, Nicaragua, Bolivia, Ecuador
Description
"We study the economic effects of durable left-populist leaders in Latin America. Using synthetic control to create a credible counterfactual for four such regimes, we find that they have, on average, a negative, significant, and sizeable average effect on income. Specifically, these countries at the end of their treatment periods end up over 20% poorer on average than what the average of their synthetic counterfactuals predict. We find negative and significant single country effects on real per-capita GDP in Venezuela, Nicaragua, and Bolivia. Only in Ecuador does GDP keep up with its synthetic counterfactual. We investigate whether there is a trade-off, where national income was sacrificed to improve inequality or health. We find no significant average counter-veiling trade-off in decreased levels of income inequality or infant mortality relative to what the average synthetic predicts."
The economic consequences of durable left-populist regimes in Latin America
"We study the economic effects of durable left-populist leaders in Latin America. Using synthetic control to create a credible counterfactual for four such regimes, we find that they have, on average, a negative, significant, and sizeable average effect on income. Specifically, these countries at the end of their treatment periods end up over 20% poorer on average than what the average of their synthetic counterfactuals predict. We find negative and significant single country effects on real per-capita GDP in Venezuela, Nicaragua, and Bolivia. Only in Ecuador does GDP keep up with its synthetic counterfactual. We investigate whether there is a trade-off, where national income was sacrificed to improve inequality or health. We find no significant average counter-veiling trade-off in decreased levels of income inequality or infant mortality relative to what the average synthetic predicts."
