The Roots and Consequence of Euroscepticism: Theory and Some New Evidence

To explain the recent rise of Euroscepticism or populism, the literature typically examines causes (e.g., welfare cut, globalization, policy reform, and recession) for an individual country and uses objective data. This paper identifies a common economic cause, i.e., "feeling of being left behind", for the recent rise of Euroscepticism across the member states of the European Union (EU). We provide a theoretical and empirical analysis on the formation of public opinion on the future of the EU and its consequence for the strength of popular support for Eurosceptic parties. Stronger feeling of being left behind among voters will lead to growing pessimism about the EU's future and rising support for Eurosceptic parties, implied by our theoretical model and supported by evidence using Eurobarometer surveys in 28 EU member states and data on election outcomes.