Max Krahé

Hanno Hilbig @hannohilbig · Sep 10

Can visible growth stop the far right?

I present new evidence that visible investment can slow the AfD's gains, but the estimated effect is pretty small: the main estimate is about one tenth of the party's overall vote share gain in Saxony-Anhalt.

The success of the AfD in Germany has often been attributed to, among other factors, lower relative affluence and a lack of a strong economic base, particularly in East Germany. This has prompted calls for growth and investment as a response to the party's rise. At the same time, big investments do happen in these states. Saxony-Anhalt has recently attracted investments including Daimler Truck's €500 million logistics center in Halberstadt, Lieken's €70 million bakery expansion in Wittenberg, and Florida Eis's €25 million ice cream factory under construction in Schönebeck.

In a new report, I assess whether these investments slowed AfD gains between the 2021 and 2026 state elections. I use data on large investments from @DezernatZ, which I validate and supplement using a range of official sources.

Using a synthetic difference-in-differences design, I find that the estimated increase in AfD vote share was about 2 percentage points smaller in municipalities with investment announcements compared to a weighted set of municipalities without them. However, this is only about one tenth of the roughly 23-percentage-point statewide gain.

Overall, the evidence suggests that even large-scale, visible investments only have small negative effects on AfD gains. This suggests limits to how much visible growth alone can achieve as a response to the party's rise.

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Max Krahé @maxkrahe · Sep 24, 2021

Wie wir die Ära Merkel verstehen beeinflusst wie wir in die Zukunft blicken. Ich hab mich an einer wirtschafts- und finanzpolitischen Bilanz versucht. Der Text wurde dann doch (etwas...) zu lang für Twitter, also als PDF hier: bit.ly/39xisdu

Die Kernpunkte in einem 🧵:

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