Year of Graduation
Populist Political Regimes in Open Economy
In this paper, three waves of Latin American populism are considered as a classic historical case of a populism cycle in countries with an open economy. The economic success of countries during the rule of populist leaders is often supported by external borrowing and high prices for natural resource export. The common outcomes of populism are economy distortions, resource dependence, a heavy external debt burden, a budget deficit, rapid depreciation of the national currency, etc. Authors apply the synthetic control method to simulate "synthetic" Bolivia (where the presidency of a modern populist Evo Morales would not have happened), which is compared with the real country in terms of real income per capita. It turns out that a hypothetical Bolivian would have had 27% more income than the real one.