Populist pull likely to persist beyond French elections – Goldman Sachs

Pierre Vernet, Research Analyst at Goldman Sachs, suggests that the France is no exception to the ongoing political realignments seen across then advanced economies in recent years.

Key Quotes

“Over the past two decades, concerns about the impact of globalisation and technological change on the French economy and society have fuelled the rise of populist voices on both the left and the right.”

“The last three Presidential elections have all served as a catalyst for a progressive re-orientation of French politics. Rather than traditional political allegiances, a distinction has emerged between: (1) socially liberal urban voters in large global cities; and (2) an electorate in urban or rural peripheries that is hostile to globalisation. These underlying political dynamics have rendered the outcome of the French election somewhat harder to predict.”

“Nonetheless, we continue to subscribe to the conventional wisdom that then populist Front National (FN) candidate Marine Le Pen is unlikely to win the second round of the 2017 French Presidential election. In a way, the still high degree of state intervention in the French economy has insulated large segments of the French electorate from the consequences of globalisation, and should therefore constrain Ms. Le Pen’s electoral base in 2017.”

“That said, our statistical analysis of the popularity of Ms. Le Pen’s FN – based on around 30,000 French municipalities since Ms. Le Pen’s first Presidential candidacy in 2012 – suggests that Ms. Le Pen has the potential to outperform current opinion polls in the first round, achieving close to 30% of the total vote. Our statistical framework sees the most powerful predictors of her popularity as: (1) distance from large, global cities; (2) economic size (based on night-time satellite-recorded light intensity); and (3) ‘cultural homogeneity’.”

“The drivers of populism / Euroscepticism are thus underlying socioeconomic and cultural characteristics. They are likely to prove persistent. On that view, the ongoing realignment of French politics into a competition between an urban socially liberal pro-European elite (likely to be represented by centrist independent Emmanuel Macron in the forthcoming election) and rural or peri-urban conservative populists (supporting Ms. Le Pen) remains incomplete. By implication, we expect the populist pull in France to continue (well) beyond the 2017 election.”