Was the great depression good for fascists?

In a recent paper and Vox EU article my co-authors, Barry Eichengreen and Kevin O’Rourke, and I examine the link between the economic conditions of the interwar years and electoral support for extremist parties. While the lessons of the period cannot be applied mechanically to the current situation they provide food for thought regarding the potential for prolonged economic hardship to generate a political backlash.

The impact of the global credit crisis has been more than just economic.  In parliamentary and presidential democracies, governments have been ousted.  Hard economic times have bred support for nationalist and right-wing political parties, including some that are actively hostile to the prevailing political system.  All this gives rise to fears that economic hard times will feed political extremism, as occurred in the 1930s.

Indeed, memories of the 1930s inform much contemporary political commentary, just as they have informed recent economic commentary.  But exactly what impact the interwar depression and economic crisis had on political outcomes and the rise of right-wing anti-system parties in particular has not been systematically studied.

We have therefore analyzed support for anti-system parties, defined as parties that explicitly advocate the overthrow of a country’s political system, in elections between World Wars I and II. We focus on right- rather than left- wing anti-system parties since it was right-wing parties, in particular, that made visible and troubling electoral progress in the 1930s.

In our paper we examine 171 elections in 28 countries between 1919 and 1939.  While the sample is weighted toward Europe (since interwar elections were disproportionately European), we also include observations for North America, Latin America, Australia and New Zealand (all elections for which we could obtain information).Our major interest is the impact of the Depression on voting patterns and hence how voting shares changed after 1929.

Our analysis shows that the Depression was good for fascists.

But it was especially good for fascists in countries that had not enjoyed democracy before 1914; where fascist parties already had a parliamentary base; in countries on the losing side in World War 1; and in countries that experienced boundary changes after 1918. The importance of democratic traditions and of the experience of the war comes through clearly.

Importantly, we find that what mattered was not the current growth of the economy but cumulative growth or, more to the point, the depth of the cumulative recession. In other words, one year of contraction was not enough to significantly boost extremism, but a depression that persisted for years was. The results also persist after controlling for a number of other factors such as the urbanisation rate and the effective electoral threshold.

Finally, we find that the electoral success of right-wing anti-system parties was shaped by the structure of the electoral system.  A higher minimum share of the vote needed in order for a party to gain parliamentary representation made it more difficult for fringe parties to translate votes into seats and lowered fascist electoral gains.

Our analysis thus suggests that the danger of political polarization and extremism is greater in some national circumstances than others.  It is greatest in countries with relatively recent histories of democracy, with existing right-wing extremist parties, and with electoral systems that create low hurdles to parliamentary representation of new parties.

Above all, it is greatest where depressed economic conditions are allowed to persist.

Read the full study here.

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