Political extremism and economic activity

We study the effect of economic activity on the vote share of extremist political parties in Europe. Using a model that addresses the prevalent endogeneity problem, which is likely to have discouraged similar research, we find that small fluctuations in income per-capita have significant inverse effects on the vote share of far-right parties. Our results explain the widespread success of such parties in entering European parliaments following the 2007-2008 crisis. They also suggest that, ceteris paribus, far-right parties on the margin of electoral thresholds run the risk of losing parliamentary representation in the face of a steadily recovering world economy.