Populist Policies and Geopolitical Turmoil
- 15 Feb 2019
Economic and Investment Impacts of Populism
Last week, George Soros issued a stark warning that Europe was sleepwalking into a populist disaster. But it's not just Europe. We appear to be moving into a political cycle where the pressure for populist policies is increasing. The below papers focus upon the movement of populism and the effects that these policies may have upon the global economy.
Immigration control and protectionist trade policies are fairly obvious manifestations of populism, but hints at the same populist tendencies can arise in other areas as well. For instance, in the United States Congress, a bill is currently being discussed that would seek to disincentivize corporate share buybacks. But many academics feel that vilifying corporations and corporate finance in this way is misguided, given the purposes that buybacks serve, including Aswath Damodaran, who wrote in detail about buybacks in a recent article.
Populism Revisited: Expect More Twists and Turns Ahead (AB, Jan 2019)
For compliance reasons, this paper is only accessible in North America and South America
The authors update their original post-Brexit research on populist agendas, finding that the movement is alive and well, and investors should expect more populist policies in the years ahead.
Far-Right Populism: Europe, Please Wake Up (George Soros, Feb 2019)
George Soros discusses the modern environment of 'radical disequilibrium' in Europe and the specific political turmoil that currently exists in Germany, the UK, Hungary, and other countries, in a call to action for the 'sleeping pro-Europeans majority.'
Dividends and Buybacks - Facts and Fiction (Aswath Damodaran blog, Feb 2019)
Buybacks are in the news. In this blog post, Aswath Damodaran argues that our views on buybacks are a function of how we think companies act, what the motives of managers are and what it is that investors price into stocks.
Populism will change corporate purpose for good (Fidelity Intl blog, 2019)
For compliance reasons, this paper is only accessible in the UK & Europe
Populist movements are beginning to propel companies to examine the role that they have in society, the goal of shareholder value maximisation, the tendency to enact exploitative labor practices, excessive executive pay, and other issues.
Top Risks 2019: Bad Seeds (Eurasia Group)
This early-2019 report by Eurasia Group contains 27-pages of analysis on the top geopolitical risks in the year ahead and how they could potentially affect the global economy.
EU migration, populism and investment risks (LGIM, Jul 2018)
For compliance reasons, this paper is NOT accessible in the United States and Canada
LGIM discusses immigration concerns in Europe, how they could continue to add fuel to the fire of populist parties, and the likelihood for an increased political risk premium as a result.
A Map for the Future of the Euro (Invesco, Aug 2018)
This is the first in a series of five papers discussing Europe's past, present, and future, co-authored by Arnab Das of Invesco's Global Thought Leadership team and former Polish deputy PM and finance minister Jacek Rostowski.