Globalization, populism and public policies

There is already an established literature on the impact of de-industrialization indeveloped economies that shows job losses, low wages, and distressed communities in “leftbehind areas”. Even though dominant factors have been technological change and tertiarization,one of the causes of these movements is the impact of globalization. These areas are at the rootof the increased votes for populist parties. Next, the paper studies the political economy of publicpolicies undertaken to mitigate or counteract these effects in depressed areas. Adjustmentmechanisms working through the markets are not enough, so regional policies are required. Weshow that tariffs have been used as a populist policy, by targeting to specific regions, but at alarge cost to national and the global economies. Can fiscal transfers solve the problem? Whatefficacy had regional policies in the EU directed to depressed areas? We show that their efficacydepends on good policies and institutional strengthening.