Far-right groups are growing in Europe and the US — from consumer decision-making to boycotts, polarisation poses corporate risks: Laura Jakli

Laura Jakli teaches at Harvard Business School. Speaking to Srijana Mitra Das, she discusses factors driving extreme politics in Western economies — and why this matters to businesses:

Q. What is the core of your research?A. I study comparative political behaviour. I specifically research how information communication technologies shape political identity and actions. I do this primarily through field and survey experiments. I have a second research stream on the destigmatisation of extreme political ideas which is more rooted in computational social science. I also study threats to democratic governance, including political apathy, exclusionary attitudes and misinformation.

Q. Why is understanding partisanship or democratic processes important to improve business administration?
A. The stability and quality of democracy affect economic growth and the business environment — increased polarisation also carries corporate risks, including that of boycotts. Behavioural experiments increasingly find partisan polarisation seeps into all sorts of consumer decision-making as well.

Business donations to political groups are also under increased scrutiny in polarised environments. Companies need to be aware of volatile politics to navigate this properly — as an example, after the January 6, 2021 Capitol insurrection in the United States, many Fortune 500 companies paused their political action committee (PAC) contributions to federal candidates. A study by Li and DiSalvo examines this moment.



Q. Why are far-right groups growing in Europe and the US?
A. The reasons are highly complex and context-dependent — generally though, rapid shifts in the global economic environment create financial instability for many. During moments of instability, people often look for a party that guarantees a return to ‘order and stability’ — this is a political message the far-right excels in communicating. They channel economic anxiety or anger even into political mobilisation. The same holds for migration and the ways this can make some natives feel unstable economically and culturally. Although increased migration in a globalised economy is largely inevitable — and migration is only expected to rise due to climate change — it can be attractive to hear there are simple solutions to this. I study how information communication technologies are used to precisely target individuals who find appeal in such political messages.

Q. What do you mean by ‘popularity cues’ in this context?
A. My current book project examines how polls and other numerical information about party popularity affect people’s willingness to publicly support these groups. I argue ‘popularity cues’ are uniquely important as signals of legitimacy to those who are inclined to support more extreme parties but are sensitive to the social implications of this support. This is where destigmatisation comes in — this is also true for backing extreme policy proposals. Popularity cues come in many forms, including the virality of a contentious political opinion piece which shows in retweets, likes, shares or how many people engaged with the content. Such cues affect people when it comes to extreme positions — they look to see how many others back these before they express their own support publicly.

Q. Can you discuss your research on factors shaping democratisation globally?
A. It is useful to examine structural factors regarding countries’ democratisation trajectories — these include fuel dependence, economic development and gender equality which challenges the power of autocrats. Fuel export dependence specifically is often seen as a challenge to democratisation — oil, for example, tends to weaken the viability of political competition. Since oil rents make governments less dependent on revenue derived from taxing people, this can lead to electoral abuses or make governments less amenable to pressures from citizens.

In previous empirical research, we found policies to alter economic dependency on hydrocarbons may greatly affect prospects for democratisation — globally, governments are now facing pressure to address climate change by taxing fossil fuels and phasing out reliance on them. But this is increasingly contentious within parliamentary democracies, particularly since green left and extreme right parties take opposing stances on climate change, its relative importance and how to address it. Even when diverse parties agree that the reliance on fossil fuels should be reduced, they sharply disagree on government policies to achieve this — fuel dependence is a salient issue where polarisation can cause a stalemate.

Q. You posit that the far-right intensifies ‘nationalist antagonisms’ — do these also impact global trade?
A. Both far-left and far-right parties often support protectionist policies that reduce foreign competition through tariffs, import quotas and other means. Currently, Europe’s far-right is much more successful electorally than the farleft, so its rise is more relevant to how different Western countries devise trade policy. There are economic and cultural consequences to open trade — these can be used to stoke nationalist antagonisms.

Q. Does globalisation then also mean the emergence of more far-right groups?
A. Broadly speaking, globalisation leads to more stark differences between economic ‘winners’ and ‘losers’ — from that standpoint, the more people are exposed to large economic shifts through trade competition or cultural shifts via migration, the more likely they could feel destabilised in a way that leads to greater demand for these parties. That doesn’t mean they’ll always succeed — but they might get more openings than otherwise.

Views expressed are personal