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Michael Hüther / Matthias Diermeier in Analyse & Kritik External Publication 2. December 2019 Perception and Reality: Economic Inequality as a Driver of Populism?

Can the rise of populism be explained by the growing chasm between rich and poor? With regard to Germany, such a causal relationship must be rejected.

Economic Inequality as a Driver of Populism?
Michael Hüther / Matthias Diermeier in Analyse & Kritik External Publication 2. December 2019

Perception and Reality: Economic Inequality as a Driver of Populism?

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German Economic Institute (IW) German Economic Institute (IW)

Can the rise of populism be explained by the growing chasm between rich and poor? With regard to Germany, such a causal relationship must be rejected.

Income distribution in Germany has been very stable since 2005, and people’s knowledge on actual inequality and economic development is limited: inequality and unemployment are massively overestimated. At the same time, a persistently isolationist and xenophobic group with diverse concerns and preferences has emerged within the middle classes of society that riggers support for populist parties.This mood is based on welfare chauvinism against immigration rather than on a general criticism of distribution. Since the immigration of recent years will inevitably affect the relevant indicators concerning distribution, an open, cautious but less heated approach is needed in the debate on the future of the welfare state. In order to address and take the local concerns of citizens seriously, an increased exchange with public officials on the ground is needed.

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