Luigi Zingales — The Real Lesson From Brexit

One of the most important–and least discussed–aspects of the vote for Brexit has been the failure of most pollsters and newspapers to predict and understand the reasons for Brexit. Even the betting market, generally much more reliable, got it wrong. This phenomenon is not unique to Brexit. Most pundits and pollsters missed the importance of Trump. Why?

What we have observed in Britain and what we are observing in the U.S. with Trump is a growing mistrust of voters toward experts. In the Brexit debate it was hard to find any economist justifying a departure from the European Union. In fact, many were willing to make forecasts so pessimistic as to be accused of scaremongering. Not only did these forecasts fail to rally the vote for Remain, they probably contributed to the victory of Leave.

In the Financial Times Chris Giles lamented this phenomenon as an example of voters’ irrationality. I fear this has nothing to do with irrationality, but has everything to do with mistrust; a mistrust that, while exaggerated, has a very rational basis: the disconnect between the intellectual elite and the population at large–the very disconnect that caused pollsters, betters, and journalists to miss the mounting Brexit wave.…

Disconnect.

ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
The Real Lesson From Brexit
Luigi Zingales | Robert C. McCormack Professor of Entrepreneurship and Finance at University of Chicago Booth School of Business

ht Mark Thoma at Economist's View