Right-Wing Populism Renders Cities Less Appealing
ResearchZEW Study Shows: Right-Wing Populism Harms a Location’s Attractiveness
Cities and regions where right-wing populist movements or parties garner broad support are at a disadvantage when it comes to recruiting skilled professionals. Security concerns and the desire to live in an environment with individuals who share similar beliefs and interests are major reasons for this. This is the result of a recently published expert brief by ZEW Mannheim.
“Cities and regions where right-wing populist parties and movements gain widespread support have a considerable disadvantage in recruiting both German and foreign skilled professionals. A key reason is that a location where right-wing populism is widely supported is perceived as less secure. Individuals who do not share right-wing populist views also anticipate weaker economic development in the medium term and difficulties in making new friends and acquaintances,” explains Dr. Tommy Krieger, a researcher in ZEW’s “Corporate Taxation and Public Finance” Unit. “Overall, with about half a dozen empirical studies, the scientific community is still in the early stages of exploring the impact of right-wing populism on the location decisions of individuals and businesses. Further research is therefore needed. So far, the consequences for the attractiveness of a location are predominantly negative,” concludes Krieger.
Right-wing populism and recruitment of skilled labour
The expert brief clearly indicates that growing right-wing populism leads to reduced migration to the affected regions. This is true for both German and foreign individuals. Furthermore, this effect intensifies among Germans who reject right-wing populist views. Key reasons for avoiding cities and regions where right-wing populism gains broad approval include security concerns and the desire to live in an environment where people share similar views and interests. ZEW economist Krieger therefore views right-wing populism as a disadvantage in the competition for skilled workers.
The first part of the expert brief provides an overview of the literature examining the influence of right-wing populism on people’s migration behaviour. The second part presents the results of an ongoing project that analyses the consequences of the far-right Pegida demonstrations in Dresden. Additionally, the project includes a survey experiment in which participants had to choose between two hypothetical locations based on various characteristics.
Right-wing populism and business location decisions
“There is virtually no empirical evidence on how companies respond to increasing right-wing populism,” says Krieger. The only two studies addressing this question provide mixed results: one shows that inventors are less likely to move to a country led by a right-wing populist government, while the other suggests that capital markets generally respond positively to right-wing populist electoral success.
