How Impatience Fuels Populism – and How Policy Can Fix It
Why do voters back populist parties even when economic evidence shows their policies cause long-term damage? The answer lies in human psychology and financial buffers.
Supporting populist parties and policy projects is frequently seen as economically ill-advised. Funke et al. (2023) estimate that economic output in countries with populist governments grows, on average, ten percent less over a 15-year period. Similarly, Bloom et al. (2025) suggest that Brexit which, in many ways, was the blueprint for modern populist policy projects, has cost the British six to eight percent of their economic output. Despite this empirical evidence, recent political shifts continue to surprise observers. In Germany, the far-right “Alternative” (AfD) is poised to govern the state of Saxony-Anhalt after securing a commanding vote share of 44%. In France, Marine Le Pen leads comfortably in the polls, and Britain now contends with two notable right-wing populist parties, Reform and Restore. Why do voters turn to populists even when economic evidence warns that such governance can harm economic performance?
Traditional explanations point to a loss of trust in traditional parties’ ability to solve economic and societal problems. Closely tied to this is the fear of economic decline in a rapidly shifting global economy. Populist platforms campaign on the promise of protecting citizens from the disruption of structural change and against the competition from foreign producers and immigrant workers. This policy offering may appeal to a wide range of voters dependent on how exposed they are to the costs of structural change. Our research shows that impatience as a psychological trait may play a key role: Across data from both the United Kingdom and Germany, we find that right-wing populist parties garner significantly more support from impatient voters than from patient ones.
What explains this observation? Structural transformation promises long-term economic benefits, but it is frequently accompanied by acute short-term adjustment costs.
Individuals must retrain, relocate or pay higher initial energy bills to fund green transitions. Later on, they are promised, they may reap the long-term rewards of globalisation and climate mitigation. Impatient individuals are systematically less willing to accept these sacrifices and to wait for the future benefits. By opposing these transformations outright, right-wing populist parties offer immediate protection from the short-term adjustment costs.
Furthermore, our research highlights how capital markets may mediate this behaviour. Savers can cushion individual adjustment costs by drawing on accumulated buffers, confident they will profit from higher future incomes once structural benefits materialise. Similarly, individuals with access to bank loans can push adjustment costs into the future, financing repayment through increased future earnings. Thus, it is primarily impatient individuals who lack savings or face borrowing constraints who attempt to avoid the adjustment costs of structural change at the ballot box. They cast their votes for right-wing populists who lure them with short-term promises.
These insights present opportunities for a forward-looking policy. Securing public support for structural change depends on how short-term adjustment costs are handled. The state can lend a helping hand to those who bear these costs, for instance, through active labour market policy focused on career reorientation and retraining or prompt financial support for regions particularly hard-hit by structural transitions. Crucially, compensation for immediate adjustment costs cannot remain a distant promise for the future. It must be delivered up front, ensuring impatient voters experience benefits right away.
- Thomas Aronsson is a professor of Economics at Umeå University, Sweden, and at the University of Graz, Austria. His research has primarily focused on public economics, welfare economics, and environmental economics. This includes contributions to the theory of optimal taxation, the theory of social accounting, and a variety of policy problems in environmental economics. He is an elected member of the Royal Swedish Academy of Sciences.
- Clemens Hetschko is a professor of Economics at the University of Leeds. He investigates how labour market phenomena, institutions, and social policies influence individual wellbeing using large-scale data. His research also spans the areas of behavioural economics and policy, the evaluation of social policy, and survey methodology. He is co-editor of the Journal of Happiness Studies, and board member of the International Society for Quality of Life Studies.
- Ronnie Schöb is a professor of Economics at the Freie Universität Berlin. His research interests primarily focus on public economics, happiness economics, labour economics and reforming the welfare state. He has published research across major scientific journals and wrote several books on happiness and social policy. He is a member of Scientific Advisory Board to the Federal Ministry of Finance in Germany.
