Austerity and the Rise of the Nazi Party

Abstract

We study the link between fiscal austerity and Nazi electoral success. Voting data from a thousand districts and a hundred cities for four elections between 1930 and 1933 show that areas more affected by austerity (spending cuts and tax increases) had relatively higher vote shares for the Nazi Party. We also find that the localities with relatively high austerity experienced relatively high suffering (measured by mortality rates) and these areas’ electorates were more likely to vote for the Nazi Party. Our findings are robust to a range of specifications including an instrumental variable strategy and a border-pair policy discontinuity design.

Betrayed by the Elites: How Corruption Amplifies the Political Effects of Recessions

“…US and on the vote for extreme parties in Europe (Funke et al, 2016;Autor et al, 2020;Dippel et al, 2021), and of austerity on the vote for far-right parties (Galofré-Vilà et al, 2021;Dal Bó et al, 2020). 8.…”

“…7.See evidence of the effects of economic crises on the rise of populist parties in Europe (Algan et al, 2017; Guiso et al, 2018a, 2018b), of immigration on the vote for extreme-right parties (Halla et al, 2017), of globalization on polarization in the US and on the vote for extreme parties in Europe (Funke et al, 2016; Autor et al, 2020; Dippel et al, 2021), and of austerity on the vote for far-right parties (Galofré-Vilà et al, 2021; Dal Bó et al, 2020). …”

War, Socialism, and the Rise of Fascism: an Empirical Exploration

“…1 Even more closely related to our work are a few papers that show the effects of economic disruption and hardship on later Nazi support. In particular, Galofré-Vilà et al (2017) and King et al (2008) focus on the effects of the Great Depression, while Doerr et al (2020) explore the consequences of the 1931 banking crisis.…”

Who Can Tell Which Banks Will Fail?

“…Finally, our paper also contributes to the literature on the Great Depression in Germany. Papers studying the more general role of the economic and political crisis and the rise of political extremism and the Nazi party are provided by Galofré-Vilà et al (2017) and Doerr et al (2021), with the latter focusing on the impact of the failure of the "Darmstaedter and Nationalbank" or "Danatbank"-the second largest bank at the time and discussed in more detail below-on the rise of fascism. Two important accounts of the crisis episode, interpreting it primarily as a banking crisis, are provided by Born (1967) and James (1984).…”

“…Classic references about the German Crisis of 1931 are Born (1967), James (1984) Balderston (1991Balderston ( , 1994, Ferguson andTemin (2003), andSchnabel (2004). Moreover, detailed accounts of the political economy around the crisis can be found in Galofré-Vilà et al (2017) and Doerr et al (2021).…”