The End of Local: How the Loss of Physical Services Fuels Political Discontent
P6-S137-3
Presented by: David Vilalta
Much of the literature on populism focuses on economic shocks or cultural transformations, yet there is limited understanding of how broader, structural economic changes influence populist support. In this paper, I examine the political effects of the withdrawal of in-person private services and argue that this process represents a new dimension of economic transformation that shapes voter behavior. Using a novel dataset on bank branches in Spain, I analyze how their closures - largely driven by the transition to digital banking - affect support for populist parties. Unlike conventional studies that emphasize direct economic hardship, I explore how changes in the availability of bank branches fuels perceptions of abandonment and restricts access to essential services, both of which can profoundly impact political preferences. To isolate the causal effect, I leverage the exogenous acquisition of Banco Popular by Banco Santander, which led to the closures of 93\% of Banco Popular branches. Results show that these closures are significantly associated with an increase in support for Podemos, Spain's left-wing populist party. Further analysis demonstrates that these effects are more pronounced in rural and smaller areas. These findings reveal that structural economic transformations not only reshape local economies but also shift political preferences toward populist parties.
Keywords: populism, globalization