Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

Why Are Illiberal Democrats Popular?

Daniel Gros 9th August 2017

Daniel Gros

Daniel Gros

The rise of “illiberal democracy” in Europe is one of the most baneful trends of our time. These regimes are typically centered on a leader who concentrates power by overriding – and in some cases eliminating – institutional checks and balances. Russia’s Vladimir Putin, Turkey’s Recep Tayyip Erdoğan, and Hungary’s Viktor Orbán represent three of the most visible manifestations of this phenomenon. But what is really noteworthy – and dangerous – is how these regimes have been able to retain popular support.

Control over traditional media, like television, radio and newspapers, is of course one reason why these regimes maintain their electoral majorities. But manipulation, or even outright control, of the media cannot explain the enduring popularity, borne out by opinion polls, of illiberal leaders.

The key reason for these leaders’ political success is that these regimes, despite positioning themselves as anti-Western, have followed the so-called Washington Consensus, which prescribes prudent macroeconomic policies and open markets.

Russia under Putin is the poster child for this approach, with the government usually running budget surpluses and accumulating vast foreign-exchange reserves. Hungary has also followed a prudent fiscal policy under Orbán; and Erdoğan has done the same in Turkey since coming to power. Public debt in all three countries is thus either already low or (as in Hungary) declining. In two of these three cases, the regime’s liberal predecessors had lost credibility because they had led the country into a financial crisis.

Illiberal strongmen have nonetheless accepted the basis of the Washington Consensus – that prudent macroeconomic policies deliver better economic performance in the long run – and have usually delegated macroeconomic management to apolitical experts. They have resisted the temptation to use short-term fiscal or monetary stimulus to increase their popularity, relying instead on identity politics to maintain electoral dominance. The longer-run result has been relatively solid economic performance – and relatively satisfied voters.

This contrasts sharply with the approach of, say, Venezuela’s late strongman leader Hugo Chávez, who maintained popular support for 14 years by spending the proceeds of a long oil-price boom on generous social programs. Now, with oil prices down by roughly half since 2014 – and no fiscal cushion in place to sustain imports – Chávez’s successor, Nicolás Maduro, is confronting a catastrophic economic crisis and escalating popular unrest.

Prudent policies thus amount to an efficient long-term strategy for regime preservation. Europe’s illiberal strongmen have recognized that if overspending leads to a financial crisis and the need to seek assistance from the International Monetary Fund, their days in power will be numbered.

Prudent macroeconomic policies support growth, but they can work only if the economy remains relatively free. Until now, neither Putin nor Erdoğan have matched their nationalist rhetoric with protectionist policies. On the contrary, Putin’s Russia joined the World Trade Organization; and Erdoğan has never called into question Turkey’s customs union with the European Union, even though bilateral relations with the EU have gone from bad to worse.

The longer-term challenge for strongmen is to keep their illiberal political regimes economically liberal. Over time, the temptation to hand over control of a growing share of the economy to friends and family becomes stronger, and corruption tends to increase, as the main game in town becomes developing political connections and currying favor with the regime. When this happens, growth is bound to decline.

This long-run threat is now most evident in Russia. Putin happened to come to power at a time when oil prices began rising from a historic low. It was thus not surprising that Russia could grow strongly during the ensuing commodity super-cycle, which ended only recently. Macroeconomic management during the oil-price boom had been prudent enough to allow the regime to withstand the recent fall in oil prices.

But now, nearly three years after the end of the commodity super-cycle, the outlook for Russia is bleak. Living standards have stagnated; and the economy’s potential growth rate is widely estimated to be just 1.5% – a level implying that Russia will remain permanently poorer than the rest of Europe.

Turkey might have reached a similar turning point. Erdoğan’s Justice and Development Party (AKP) inherited an economy that was rebounding from a deep financial crisis and had substantial growth potential, owing to ongoing urbanization and gains in the population’s educational level.

Until recently, the AKP’s government limited its interference to the domestic side of the economy, such as government procurement and infrastructure spending. But, after last year’s botched military coup, the regime has empowered itself to seize businesses owned by those accused of sympathizing with the so-called Gülenist movement, which Erdoğan accuses of having masterminded the coup attempt.

Hundreds of businesses have already been seized and placed under the administration of Erdoğan’s close associates. If this continues, entrepreneurs will stop investing, and growth will falter. The problem is that once an illiberal regime has started down this road, it cannot easily re-establish a credible commitment to respect property rights, because the institutions that ensure this in liberal democracies, like an independent judiciary and a professional civil service, no longer exist.

Today’s European strongmen have retained popular support by maintaining the relative economic freedom on which long-term prosperity depends. But as these regimes become increasingly authoritarian, their ability to keep voters happy is becoming more and more doubtful.

Republication forbidden. Copyright: Project Syndicate 2017 Why Are Illiberal Democrats Popular?

Daniel Gros

Daniel Gros is Director of the Centre for European Policy Studies in Brussels.

You are here: Home / Politics / Why Are Illiberal Democrats Popular?

Most Popular Posts

Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse
income inequality,inequality,Gini,1 per cent,elephant chart,elephant Global income inequality: time to revise the elephantBranko Milanovic

Most Recent Posts

Pakistan,flooding,floods Flooded Pakistan, symbol of climate injusticeZareen Zahid Qureshi
reality check,EU foreign policy,Russia Russia’s invasion of Ukraine: a reality check for the EUHeidi Mauer, Richard Whitman and Nicholas Wright
permanent EU investment fund,Recovery and Resilience Facility,public investment,RRF Towards a permanent EU investment fundPhilipp Heimberger and Andreas Lichtenberger
sustainability,SDGs,Finland Embedding sustainability in a government programmeJohanna Juselius
social dialogue,social partners Social dialogue must be at the heart of Europe’s futureClaes-Mikael Ståhl

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

The winter issue of the Progressive Post magazine from FEPS is out!

The sequence of recent catastrophes has thrust new words into our vocabulary—'polycrisis', for example, even 'permacrisis'. These challenges have multiple origins, reinforce each other and cannot be tackled individually. But could they also be opportunities for the EU?

This issue offers compelling analyses on the European health union, multilateralism and international co-operation, the state of the union, political alternatives to the narrative imposed by the right and much more!


DOWNLOAD HERE

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

The EU recovery strategy: a blueprint for a more Social Europe or a house of cards?

This new ETUI paper explores the European Union recovery strategy, with a focus on its potentially transformative aspects vis-à-vis European integration and its implications for the social dimension of the EU’s socio-economic governance. In particular, it reflects on whether the agreed measures provide sufficient safeguards against the spectre of austerity and whether these constitute steps away from treating social and labour policies as mere ‘variables’ of economic growth.


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube