Populism

Since the mid-2000s, democracy has regressed in nearly every part of the world. Global monitoring organization Freedom House (for whom I consult on reports on several Asian states) has recorded declines in global freedom for twelve years in a row. States like Bangladesh, Thailand, and Turkey have seen democracies completely collapse. Countries where democracy seemed to be making gains in the early 2010s, like Myanmar and Cambodia, have slid backwards, with Cambodia falling into one-party rule. In a recent article for the Washington Post, I outlined how hard it will be for countries to rebuild free political systems after their democracies collapse. As a recent study by the Tony Blair Institute for Global Change found, elected populists tend to hold office, on average, more than twice as long as elected non-populist leaders, giving these populists considerable time to undermine democracy. The same study found that populist leaders often expand executive power dramatically and foster widespread corruption. In fact, in states where autocratic-leaning populists are destroying democracy, it may be even harder to rebuild than in places, in the past, where old-school strongmen like military coup leaders simply crushed democracy. Yet even after democracies collapse or severely regress, all hope is not lost. The road back to free politics is very arduous—and certainly sometimes unfixable—especially after autocratic-leaning populists undermine democracy. But there are some ways that citizens in regressing democracies can help preserve their political institutions, keep hopes of democracy alive, and possibly help their political systems rebound in the future. For more on how they can do so, see my new piece in World Politics Review.

His personalistic presidency threatens years of hard-won institutional gains.

Injustice, not economic class, is what’s turning voters against the political establishment. 

While populism is sweeping through Europe and parts of the Americas it is also making gains in Southeast Asia. The region’s autocrat-leaning populists—those who have already ruled and those who are attempting to win power—use similar strategies: positioning themselves as outsiders who can solve problems where elites have failed, offering brutal approaches to crime, targeting vulnerable groups within societies, and ultimately undermining democracy. Two of the region’s six biggest economies—the Philippines and Thailand—already have had autocratic-leaning populist leaders, and a third, Indonesia, could be run by a populist after presidential elections next year. The emergence of autocratic-leaning populism could further erode democracy and stability in a region that had, until the past decade, been growing freer. For more on how populism is expanding in Southeast Asia, and how Southeast Asian populism differs from its better-known peers in Europe and North America, see my new CFR Explainer.

The region’s fast-growing but fragile democracies have been susceptible to strongmen and autocratic-leaning populists in recent years, propelled by concerns over inequality, crime, and dysfunctional governments.

It should not be a surprise except to the most hopeful that Recep Tayyip Erdogan is once again president of Turkey and his Justice and Development Party (AKP) will enjoy an effective parliamentary majority with its partner, the Nationalist Movement Party (MHP). Erdogan supporters are rejoicing while his opposition, which many Turks believe was revitalized even in defeat, licks its wounds. It is an outcome that sounds familiar and was likely never in doubt. President Erdogan has worked hard over seven long years to get to this point; he can now put what Turks refer to as the “executive presidency” into action. As a result, he will enjoy significant new powers with little oversight, allowing Erdogan to pursue the transformation of Turkey into a powerful, prosperous, and pious society unencumbered. The extraordinary aspect of Turkey’s elections was obviously not the outcome, but rather the way it was conducted. The entire process was somewhere on the spectrum between free and unfree and fair and unfair, bewildering participants and observers alike. The confusion helped Erdogan win with a veneer of democratic legitimacy. It seems to be the perfect template for future elections in Turkey and other countries with populist and authoritarian leaders. When the polling stations closed and the ballots were counted, Erdogan won 52.5 percent of the vote, soundly defeating his closest competitor, Muharrem Ince of the Republican Peoples’ Party (CHP) who garnered 30.7 percent of the vote after a spirited campaign. In the parliamentary elections, the AKP lost 7 percent of its vote total from the controversial November 2015 election. Even though it can claim 42.5 percent electoral support, it lost its parliamentary majority. However, its partner, the MHP, won 11 percent of the vote, meaning that as long as the two parties stick together they will effectively control the parliament. The CHP won 22.6 percent of the vote while a new party called Iyi (Good) Party attracted 9.95 percent of Turkish voters. The Kurdish-based People’s Democratic Party (HDP) won the requisite minimum 11.7 percent to earn mandates in the Grand National Assembly. For Erdogan and the AKP there is no reason to question these results. Erdogan has a strong record of accomplishments and has remained popular; Ince drew huge crowds leading up to Sunday’s vote without interference from the government; the HDP, whose leader is in jail with most of the rest of the party’s senior officials, made it into parliament; and the AKP actually lost its parliamentary majority. This is all entirely accurate, but the opposition has many legitimate concerns about the government’s conduct prior to and during the elections. For example, like the 2017 constitutional referendum that paved the way for the executive presidency, Erdogan and the AKP dominated the media. According to Reuters, in May Erdogan enjoyed almost ten times as much airtime as Ince on TRT—Turkey’s state broadcaster. The Iyi Party’s presidential candidate, Meral Aksener, got a measly twelve minutes of airtime. These huge disparities are compounded by the fact that after fifteen long years of AKP rule most of Turkey’s privately held media outlets mindlessly recycle Erdogan talking point out of either ideological conviction or fear. Then there is the question of the MHP’s results. This is a party that split in 2017, that had become a wholly owned subsidiary of the AKP, that never held a campaign rally, and in only one poll did it come close to the 10 percent threshold to enter parliament, but it nevertheless garnered 11 percent of the vote. How did this happen? One line of analysis suggests that Iyi, which Aksener carved out of the MHP, drew votes away from CHP, not her former party. It is a plausible scenario, but the result is so at variance with almost every poll that it deserves scrutiny, especially since the implications of an AKP-MHP majority in parliament for Turkish politics are so important. Under the new system, if the president is a member of the party that controls the Grand National Assembly, his or her powers are largely unchecked. The alliance gives Erdogan and AKP that effective majority. Their supporters argue that the difference between the MHP’s results and its poll numbers is the result of unprofessional pollsters rather than manipulation. In fairness, Turkey’s polling agencies do not have a sterling record.     After the polling stations closed, the state run news service, Anadolu Agency, behaved less like a news organization than an arm of the AKP. Anadolu’s early projections of an Erdogan win with support in the mid-50 percent range seemed intended only to sow confusion at a moment when there was a cascade of exit polls that are notoriously inaccurate. Ince intimated as much when he declared that Anadolu was projecting results based on a relatively small number of returns from smaller cities and towns that were known AKP strongholds. The Supreme Election Council (YSK) is supposed to have the first and final word on results, yet Erdogan declared victory before it was finished counting ballots from what the opposition believed were vote rich districts in Ankara and Istanbul. It turns out that Anadolu’s projections and the CHP’s own vote tracker eventually converged, but the aggressive and early call of the presidential election raises serious questions whether it was employed to establish a fait accompli. Finally, there is the composition of the YSK, which is supposed to be an independent body, but its officials are all AKP appointees. It is the government’s prerogative to appoint to this agency whomever Turkey’s leaders would like. Yet given the way in which the AKP has politicized, manipulated, and hollowed out Turkey’s institutions, it seems unlikely that the YSK would defy Erdogan. Midway through the the 2017 constitutional referendum, its officials ruled that ballots without the required official seals would nevertheless be counted as valid, a decision that opponents believe lifted supporters of the executive presidency to victory. This is why Ince’s supporters were so fearful that once Anadolu declared Erdogan the victor, the YSK would just rubber stamp the result. Then again, there is no evidence that Erdogan’s victory is fraudulent. Sunday’s Turkish election is a perfect example of post-truth politics. There are two competing narratives that partisans on both sides believe in fiercely. They respond ferociously to any effort to question their particular truth even if there are good reasons to do so. The unfortunate result is more anger, greater polarization, further instability, and a deepening of authoritarianism. This is Turkey’s present, but it is the wave of the future.

Markets welcomed the International Monetary Fund’s (IMF) $50 billion rescue stabilization package last week, which seems to be stabilizing the peso. But the financial umbrella will be costly. Rightly or wrongly, Argentines blame the IMF for precipitating their country's worst economic crisis. In the eyes of many voters, the mere association will damage President Mauricio Macri’s standing. As detrimental, the IMF entrance means an end to the economic gradualism of the last two-and-a-half years: Macri's strategy of trying to right the policy wrongs of more than a decade of mercurial rule by his predecessors while avoiding the political pain of austerity. Despite the public messaging that Argentina will make the decisions, and that social policies will remain in place, the new economic constraints accompanying the package threaten the political future of one of Latin America’s most market-friendly leaders. Macri’s fate shows how hard it is to recover from economic populism. Despite a deep bench of technocrats and broad societal support for change, Argentina’s structural flaws remain, hampering growth, productivity, and competitiveness. Gradualism achieved some real results. Macri freed the exchange rate, eliminated capital controls, and reduced agricultural export taxes. He rebuilt the statistics agency, gave the Central Bank back its autonomy and opened up infrastructure projects to private investment. He began to tackle the gaping budget deficit by hiking utility prices, re-calculating pension benefits, and resolving a protracted dispute over financial transfers to the provinces. All of these market-affirming steps were incremental—slowly reducing distortions of quotas, subsidies and other taxes, and trimming or re-orienting government spending. And they were complemented by millions more in social assistance and by billions more in public investments. The economy bounced back. By the second half of 2017 construction was flourishing and manufacturing recovering. Inflation finally started to decline. What didn’t change was the government’s need for cash, as economic gradualism required lenders to keep it afloat. After resolving claims from Argentina’s debt default saga, Macri’s administration swiftly became one of the most active international emitters—placing more than $100 billion in debt. Yet now, hit by a global investor pullback from emerging markets, the worst drought in three decades and a few homegrown political stumbles, Argentina is again being forced onto a more orthodox economic and financial path. With the IMF back in the picture, inflation will have to come down faster. This means the Central Bank will keep interest rates higher for longer, choking the incipient economic recovery. The deficit, too, has to be cut more drastically. Infrastructure spending that might otherwise spur growth will take a hit. But the real budget-buster is public sector employment, which grew under the Kirchners to represent nearly one in three jobs. To balance accounts, Macri will have to take on government workers. And voter patience is finally wearing thin. Since his victory in the October 2017 midterm elections, polls show Macri losing ground; fewer than half of Argentines approve of him or his government. Economic austerity will further erode this base. The crisis has become a rallying point for a deeply divided opposition. For the first time since Macri came to office, Peronist and Kirchner congressional delegates have teamed up, passing a bill that lowered utility tariffs back to November 2017 levels and forcing the president into an uncomfortable veto. Macri and his team still have 16 months before the next presidential election. The economic pain could fade before voters truly contemplate their vote. A push for concessions and other infrastructure partnerships could let private investors pick up some of the public-sector slack, lessening the cost to jobs and growth. And while the opposition shows signs of coalescing, it is far from uniting around a candidate to challenge Macri in the 2019 election. Macri’s stumbles also highlight the systemic destruction economic populism reaps. Debt can be renegotiated, currencies devalued, and other one-time shocks absorbed and overcome. But the entrenched political clienteles created by subsidies, quotas, bloated public payrolls, and other forms of political patronage are much harder to break up. Public largesse in the form of expanding benefits and entitlements become both unassailable and unsustainable. Even the ways of doing business change the calculus of the profit-minded, at least in some sectors, to favor rent-seeking over market-based competition. To reverse these pernicious shifts requires more than one presidential term. Sadly, Argentines may not grant Macri’s Cambiemos coalition the benefit of the doubt. View article originally published on Bloomberg.

Globally, democracy has been retreating now for more than a decade. But since 2016, the pace of democratic regression has accelerated, and the rollback has spread from regionally powerful countries that had only recently established democracies to globally powerful states, and ones where democracy seemingly had sunk stronger roots. Indeed, 2016 and 2017 seemed to bring only misery for democrats. But if 2016 and 2017 looked bad, the next three years could well be worse. For more on how the global democracy recession will deepen, see my new piece on Aspenia Online.

By the middle of 2017, following Emmanuel Macron’s dominant victory in France’s elections, the relative underperformance of populist parties in elections in the Netherlands, and the backlash in the United States against Donald Trump, some commentators argued that the populist wave might have peaked. But any optimism that populism will recede in 2018 and 2019 would be misplaced. In fact, populist parties and leaders are poised for a banner year in 2018 and, possibly next year as well. In so doing, they may further fuel the global democratic decline. For more on populism’s continued viability in 2018 and 2019, see my new Washington Post article.

In 2018, nearly two out of every three Latin Americans will head to the polls to elect new leaders, and the fight against corruption will be high on their agenda. The surge to throw the bums out could be a harbinger of cleaner politics. But a revival of the region’s tradition of populism could also threaten the nascent institutions and mechanisms that are Latin America’s best hope for a more honest tomorrow. Voters are rightly enraged about corruption. Nearly every country has seen its share of high-profile scandals. In Mexico, governors have allegedly stolen land, pilfered workers’ social security contributions, received public contract kickbacks, and even replaced children’s chemotherapy medicine with water to make a buck. In Honduras, tens of millions of dollars have vanished from the social security system under the president’s watch. In Brazil a third of the congress, five former presidents, eight cabinet ministers and scores of other officials are under investigation or indictment for bribery and other crimes. Even the supposedly pristine nations of Chile and Costa Rica have been drawn into the muck: President Michelle Bachelet’s son was part of a shady real estate deal and all three branches of the Central American government were rocked by a cement import scandal. The aggregate costs of corruption for the region are staggering, leeching tens of billions of dollars each year from the Brazilian and Mexican economies, 3 and 5 percent of gross domestic product respectively. In Colombia, an estimated one out of every 10 public dollars disappears — equivalent to the entire health budget. Yet corruption’s emergence as a major political talking point is largely the result of positive regional trends. Nearly all of the nations are now democracies. The shedding of authoritarian pasts has enabled the rise of a freer press, with intrepid reporters eager to uncover misdeeds. Their investigations, in turn, have benefited from new tools, including freedom of information acts that have opened up public logs to scrutiny. In some countries, hard-fought judicial reforms are also bearing fruit, empowering more professional and autonomous judges and court officials to take down wrongdoers. Bolstering these institutional changes are societal shifts. The growth of a middle class — now a full third of the region’s population — means tens of millions of citizens are no longer just focused on day-to-day survival. And they are paying taxes that they hate to have disappear.  Yet almost daily revelations of malfeasance, combined with excruciatingly slow progress in bringing the perpetrators to justice, have led to disappointment, frustration and real anger with the political establishment. As a result, today’s batch of centrist, pragmatic and market-friendly presidents all wallow in the public opinion doldrums — only Argentina’s President Mauricio Macri breaks even on approval ratings. This rising disgust has opened the door again to populist outsiders who use corruption as their new rallying cry. In Honduras, TV personality Salvador Nasralla campaigned on human rights and corruption. In Mexico, Andres Manuel Lopez Obrador hammers his opponents as a political mafia only he can dismantle. In Brazil, though the left remains behind former president Luiz Inácio Lula da Silva despite his corruption conviction, the centrist parties have collapsed under the weight of similar charges. In Colombia, the anti-establishment sentiment is so strong that vice president German Vargas Lleras has cut ties with his party to run on his own. In past decades, Latin America’s economic populists have exploited the real gaps between the region’s have and have-nots, riding these class tensions into office. Once there, they have used their power to override central bank independence, ignore congressional budget limits, and erode other checks and balances. Their profligate spending cultivated their political base even as it led to spiraling inflation, falling investment and an inevitable economic crash, hurting their supporters more than anyone. If this populist past is any guide, today’s anti-corruption crusaders could also make things worse. By trampling legal niceties as they go after those they have identified as past aggressors (usually their political opponents), they could undercut the very slow but real progress that is being made, undermining the transparency and accountability needed to stop similar behavior in their own ranks. In this respect, the recent hurried charges brought against former Argentine president Cristina Fernandez de Kirchner and her cronies are worrisome. Pragmatic, institutionally minded leaders are the only ones equipped to address the underlying reasons for voters’ justifiable anger. What Latin American nations need are incremental improvements that strengthen institutions. What they may unfortunately get is leaders with grandiose but empty promises. View article originally published on Bloomberg.

The rise of populist leaders and parties in Europe and the United States over the past two years has reshaped the political landscape from Budapest to Washington. Challenging elites as corrupt and disconnected from common concerns, these populists claim to derive their legitimacy from the supposed will of the people and usually use their influence to blame some “other” for the country’s ills. They have tried to upend post-Cold War norms on everything from free trade to the integration of Europe, raising fears in the West about the strength of the rule of law and even democracy itself. But this intense focus has overshadowed the growing threat of populism in another major region of the world that is already susceptible to a higher chance of conflict than the West: Asia. Unlike in the West, where populism is still constrained by strong democratic institutions and norms, institutions in Asia are weaker and most Asian populists have little concern for the rule of law, so populism could actually prove more dangerous to democracy.  For more on the challenge of populism in Asia, see my new World Politics Review article.

Throughout his first ten months in office, President Trump has portrayed himself not only as a champion for workers—a debatable claim—but also an important friend to American business. He has stacked his cabinet with former executives. Perhaps most important, Trump now has made corporate tax reform a top priority. And indeed, despite CEO resignations from various Trump consultative councils, as CEOs balked at being associated with some of Trump’s comments on cultural issues, the business community still has high hopes for his administration. But in the long run, Trump could actually do significant damage to U.S. business—and many corporations are not fully cognizant of the dangers he poses. Dangers lie just over the horizon—and can be seen by studying how other, Trump-like populists around the world have seized control of and damaged their economies over time. For more on how Trump resembles other populists, and how his populism could ultimately affect business, see my new piece for the Globalist.