The interplay between economics and politics has always been complex, but recent developments in the energy market have added a fascinating new layer to the story.
Speaker: Jan Steckel, Head of working group Climate and Development, MCC
Abstract: We study the impact of the 2022-2023 energy crisis in Germany on political attitudes. We collect 4 waves of panel data to measure how political stances change with increasing energy prices for households. Our difference-in-differences estimation exploits unique features of the German energy sector’s billing routines, which allows for a quasi-experimental design. We show that increases in electricity payments lead to a decline in support for democratic institutions, with effects intensifying over time. We also find that the price shock increased support for the far-right populist party among people who have little trust in the responsible use of public money.
