S7 Ep56: Populism and war

Episode Summary

Executive Summary: The episode discusses the paper "Populism and War," which argues that a populist leader in a major power—using Donald Trump as the key case—can raise conflict risk abroad by combining protectionism, disengagement, and nationalist economic policy. The mechanism is reduced trade gains and weaker external support for vulnerable groups, shifting domestic and interstate power balances and increasing inequality or conflict.

Main Topics: Trump as the archetypal populist (Priority: 5/5): Morelli explains why Trump fits the paper’s definition of populism: simple, monitorable policies, exclusion, protectionism, and disengagement driven by distrust of traditional politics and markets. Channels from populism to international relations (Priority: 5/5): The discussion distinguishes trade relations from security relations and shows how an "America First" agenda affects both by cutting cooperation and narrowing U.S. engagement to directly beneficial cases. Domestic conflict risk in divided countries (Priority: 5/5): The model predicts that when U.S. protectionism and disengagement reduce resources and external support, internal opposition groups in ethnically or religiously divided states become more vulnerable, increasing inequality or civil conflict. Interstate conflict risk and balance-of-power shifts (Priority: 4/5): Protectionism reduces the peaceful surplus from trade and can tempt stronger states to use force more readily, especially where trade exposure and relative power already exist. Empirical mapping of high-risk countries (Priority: 4/5): The authors build a data-driven map using ethnic-group power mismatches and trade exposure to identify countries likely to face heightened civil conflict risk after a populist superpower shift. Implications for Europe and other blocs (Priority: 4/5): Morelli argues Europe should deepen political, fiscal, and military integration to avoid fragmentation and better respond to a world of stronger blocs, while being cautious about enlargement that adds veto points or border flashpoints.

Key Arguments: Populism is characterized by simple, easily monitored policy commitments that appeal to citizens who distrust elites and markets, making exclusionary and protectionist policies politically attractive. Trump is described as the quintessential populist because his agenda from the start centered on walls, blocks, protectionism, disengagement, and "America First." In international relations, populist policy reduces cooperation in trade and security where it does not directly serve domestic economic goals. Using tariffs to finance tax cuts is presented as a new Trump-era twist that broadens the appeal of protectionism, even if economists see it as odd. For domestic conflict, a populist superpower can weaken opposition groups in divided countries by shrinking export revenues and withdrawing indirect U.S. support, forcing a country toward either higher inequality or conflict. For interstate conflict, reduced trade gains lower the opportunity cost of force, making conflict more tempting for relatively stronger states. The paper focuses on Trump because the U.S. is a superpower and its leader affects the global equilibrium more than populists in smaller states. The authors note that civil-conflict predictions are more straightforward than interstate predictions because coalition changes complicate the latter. Their empirical approach combines a dataset of ethnic-group power and military strength with measures of export dependence to identify countries facing a conflict trigger. Europe can reduce risk by becoming a more coherent geopolitical actor, but enlargement should be sequenced carefully to avoid new veto points or border conflicts.

Data Points: Conference: 3rd Kiel CEPR Conference on Geoeconomics - The podcast is based on presentations from this conference in Berlin in October. Publication date: October 2024 - The paper "Populism and War" was published in October 2024. Number of authors: 3 - The paper is authored by Andrea Battozzi, Massimo Morelli, and Markos Nakaguma. Risk countries mentioned: Iraq, Mali, Democratic Republic of Congo, Ghana, Botswana, Zambia, South Africa - Morelli lists countries flagged by the paper’s civil-conflict analysis. Border/enlargement examples: Serbia and Georgia - Discussed as potential EU enlargement cases that could create geopolitical or veto complications. Alliance bloc examples: BRICS Plus - Used as an example of coalition dynamics complicating interstate-conflict predictions.

Pivotal Quotes: "Trump is quintessential because that's from the very beginning what he did, proposing a policy of exclusion, blocks, protectionism, disengagement." — Massimo Morelli: Explaining why Trump fits the paper’s definition of populism. "The disengagement doctrine... does not necessarily mean disengagement of the US from international disputes. It actually means that the US wants to disengage from helping a third country in a dispute with the fourth one." — Massimo Morelli: Clarifying the paper’s concept of disengagement in foreign policy. "So it's always like either one or the other." — Massimo Morelli: Describing the model’s prediction that divided countries face either higher inequality or conflict after the shock.

Implications: If the model is right, a second Trump presidency could raise civil and interstate conflict risks in vulnerable regions while weakening cooperation. Investors, policymakers, and allies should watch countries with divided societies and trade dependence, and Europe may need deeper integration to respond effectively.