A study recently released in Germany demonstrates that right-wing parties win on average 30% more votes after a financial crisis. The success of France's Marine Le Pen is just the latest example.
MUNICH — In September 2013, right in the middle of Greece"s financial crisis, rapper Killah P was murdered, stabbed to death. He was watching a soccer game with friends at a coffeehouse when Greek neo-Nazis gathered to confront him. Later a member of the populist far-right Golden Dawn party was arrested for the crime.
Ever since the economic free-fall in Greece, people have been turning to neo-Nazi groups. Before the crisis hit the country, Golden Dawn received no more more than 0.3% of the vote, but since the crisis the number has gone up to about 7%.
Though the situation is terrifying, it is hardly new, with evidence going back in many countries for more than 140 years: After financial crises, right-wing parties get approximately 30% more votes in elections than they did previously. This has been demonstrated by an economic study of 800 elections in 20 countries, the results of which were released by Munich's Ifo Institute for Economic Research.
If a country's banks suffer, the consequences on society are dramatic. Institutes close agencies, declare bankruptcy or require the state to save them. After that, fewer credits are given to manufacturers and clients, less merchandise is produced and sold, people lose their jobs, unemployment rises. The new study shows that financial crises also put pressure on the democratic system and create political chaos.
For example: street violence. Anti-government demonstrations and violent confrontations increase after a financial crisis — and the government feels this during elections. Since World War II, governing parties have lost up to 4% during elections that follow such crises. It is common for the opposition to win and for legislative bodies to become fragmented.
Those evolutions may make a country a lot more difficult to govern, in part because the government has a harder time easing the consequences of the crisis for citizens and enacting reforms that are meant to help avoid the next one.
In this past Sunday's first round of regional elections in France, the success of the right-wing National Front party — led by Marine Le Pen — comes as the country remains mired in a record period of high unemployment.
Between the two world wars, this was mainly seen in Germany and Italy. It's alarming that after 1945, right-wing parties in many countries have enjoyed considerable success — not just right-wing populists but neo-Nazi parties too.
Left-wing radical groups, on the other hand, haven't recorded increases in political support. Greek's left wing Syriza party, which evolved from a small opposition group into a ruling party, remains the exception to the rule.
The study's authors have concluded that governments and central banks carry a lot of responsibility for political stability when watching over financials markets. In other words, avoiding financial crises reduces the likelihood of a political disaster.
The good news is that political turbulence does eventually fade. But it takes some time. According to the study, five years after a crisis breaks out, right-wing parties are generally at the height of power, but after that the extremists lose favor. Eight years later, their influence is no longer measurable.