In 2015, we published a study that compiled data on nearly 100 financial crises and more than 800 national elections in 20 democracies since 1870. We found that far-right parties are the biggest beneficiaries of financial crashes. After a crisis, the share of the vote going to right-wing parties increases by more than 30 percent. We also found that government majorities tend to shrink and governing becomes difficult as more parties and antiestablishment groups get into legislatures. These effects turn up in the wake of financial crises but, crucially, not in normal economic downturns. 

People want to attribute blame, and the right is willing to present scapegoats….

Right-wing populists are much more willing to exploit cultural cleavages and blame economic problems on foreigners and those who supposedly put the interests of a global elite above those of their fellow citizens. As British Prime Minister Theresa May put it last year, “If you believe you are a citizen of the world, you are a citizen of nowhere.” The left, by contrast, has traditionally taken an internationalist outlook and usually avoids crude rhetoric against foreigners and minorities. People want to attribute blame, and the right is willing to present scapegoats: immigrants, China, or the European Union. The names change but the playbook remains the same. 

Our historical data show that most political upheavals after financial crises have been temporary. After five years, voting patterns usually return to their pre-crisis status quo, fractionalization within parliaments decreases, and the far right loses its momentum. 

This time is different. Ten years on, fractionalization, polarization, and far-right voting are all alive and well. The established political system continues to stumble from one shock to another. Even countries that until recently had been immune to far-right politics have started to succumb.