Populism and its Consequences

By Paula Ganga

A photo of Paula Ganga.
Paula Ganga

The recent wave of populist electoral advances across the world has been analyzed as a reaction to the sweeping changes brought on by globalization, from financial crises and economic dislocations to increased immigration. The anti-immigrant, anti-refugee, and nativist rhetoric present in many of these campaigns has received the bulk of the academic attention. While the cultural and identity elements behind the recent populist resurgence are important when explaining why more extreme parts of the electorate support these movements, populist parties platform on economic matters—specifically how to deal with the consequences of globalization or regional integration—is what attracts more comparatively moderate voters to these parties, propelling them to the current situation where they might actually stand a chance to gain the highest political offices in the land.

The economic dimension of the populist agenda is important in spite of the difficulties in studying it. Most researchers argue that populist parties are often vague in their policy promises beyond their trademark anti-immigrant stance. Many view populist economic agendas as simple rants against economic liberalization, foreign involvement in national economies and a promise to reverse the economic consequences of the last thirty years of globalization, financialization, and liberalization. If these are just vague promises but which combined with identity politics end up propelling these parties to power, then what happens once these parties actually get to make policy. What do populist politicians do once they get to power? And what do populist parties brought to power to dismantle “politics as usual” do in order to change “economics as usual”? Considering the disillusion felt by a majority of today’s electorate in the outcomes of liberalization and globalization, these questions become more relevant than ever.

To answer these questions, I examine the economic policies of populist parties in government using both large scale statistics as well as the concrete case of populist political parties actually getting to power and governing on a platform of anti-liberalization, anti-globalization, nationalization and state resurgence. In my work I argue that populist electoral victories lead to governments that will enact policies of economic nationalism while at the same time selecting into specific benefits provided by the current international financial system. As much as populist leaders campaign on anti-globalization platforms, actually enacting a national policy of economic nationalism would lead to economic downturn. Thus, leaders selectively pick the elements of the current liberal order that give them more benefits, either material or electoral, without abandoning their anti-globalization stance. For example, populist leaders in Europe often win with strong anti-EU platforms railing against the free movement of goods, people and capital and voted into office by citizens who see themselves as losing from globalization. Yet once in office these politicians take full advantage of the material benefits of EU membership and economic openness. In my work I examine the interplay between policies of economic nationalism and selective embedded liberalism in the case of recent European elections.

Economic nationalism is ever more present in European populist rhetoric as socio-economic issues are at the heart of the populist agenda. In their defense of “the people” against “the elite,” populists try to speak directly to the “losers of globalization”—often equated with the people—and sharply criticize those who gained from liberalization and globalization, usually the political and economic elites—national or international. Additionally, perceived lack of responsiveness of established parties to the plight of the “globalization losers” provided a chance for their mobilization by the new populist right. Recent political campaigns run by this kind of leaders show the way well-versed orators can turn the distinction between people and the elite into a major political division that spurs voters into anti-establishment voting and desire to “drain the swamp” of “politics as usual.” For example, criticizing the EU and its purported nefarious influence on European domestic politics has become a political sport for populist politicians across Western and Eastern Europe. From UKIP Brexiters claiming the money sent to the EU should be kept in the country to fund the National Health System to Hungary's Viktor Orbán comparing the EU to a colonial enterprise, populist leaders gather strength from undermining a keystone institution for the post-World War II Western order. With this strategy in mind, populist parties focus much more attention than mainstream parties on sending as many representatives as possible to the European Parliament, seeking to weaken these institutions from within. As much as populist leaders campaign on anti-globalization platforms, actually enacting a policy of economic nationalism would lead to substantial economic downturn from cutting trade ties with important markets for domestic goods to no longer accessing huge amounts of foreign investment. Thus, leaders selectively pick the elements of embedded liberalism that give them more benefits, either material or electoral, without abandoning their anti-globalization stance. For example, populist leaders in Europe often win with strong anti-EU platforms, railing against the free movement of goods, people and capital, and are backed by voters who see themselves as losing from globalization; yet, once in office, those same leaders take full advantage of the economic benefits of EU membership and the free movement of capital.

Viktor Orbán's government enacted widespread expropriations of foreign investment, nationalizations of privately-owned property and a strong return of the state in economic matters. But the economic nationalism of these policies was accompanied by a selective pursuit of international economic ventures. While foreign banks in Hungary saw their investments expropriated, EU funds and Chinese investments were actively pursued in order to keep the government's budget afloat. Orbán and other leaders like him promote a domestic rhetoric that highlights their country's “freedom fight” against the shackles of EU, World Bank and IMF regulations. Yet, at the same time, these leaders remain aware that EU funding sustains their budgets, while World Bank projects and IMF loans pay for state infrastructure, health and education investments that would otherwise not happen. However, sometimes EU funds not only support these economies but the populist leaders themselves. Recently, the prime minister of the Czech Republic—the second wealthiest businessman in the country who won elections with an aggressively populist agenda—was accused of benefiting from billions of Euros of EU subsidies to his businesses and now faces calls for resignation from increasingly large street protests.

The postdoctoral fellowship at the Skalny Center was crucial in furthering my research this past academic year. While at Skalny I presented my research at major political science conferences, participated in US and international workshops and was an invited speaker to a campus event on Brexit and populism organized by the political science students at Rochester. Students at Skalny and Rochester in general have been very interested in learning and discussing the issues I explore in my research. Beyond the event I also offered a class on “Populism in 21st Century Politics.” Twice a week during the spring semester my class explored not only the different facets of populism but also the various geographical varieties of populism from Europe to the US to Latin America. In one of the most interesting learning experiences of the semester two students from different regions of Ecuador made presentations on how the first populist president of Ecuador was perceived differently across the communities and regions of the country. The engagement of the students with the topic of the course meant deep conversations in each of the course sessions with students exploring their own interests in individual presentations covering varied topics such as populism in the Caribbean, populist rhetoric and mass violence in Africa, populist media in Scandinavian countries and populism and minorities rights. We explored populist rhetoric, tactics, and policies in Europe, Latin America, South Asia, Africa as well as historical cases from the US, Russia and Europe. Teaching this course at Skalny allowed me and the students to explore the latest scholarly works on these varied topics as well as present my own work on populism.

My research shows that understanding this populist selective approach to international affairs that only seeks to maximize domestic goals will have far-reaching consequences for international politics. While it makes sense to constantly have in mind one’s constituency, adopting an unapologetic nationalist stance will undoubtedly shake the foundations of the international order to the core. The practice of criticizing the EU has already resulted in deep disillusionment with the European project, and to some degree bears responsibility for the Brexit debacle. But the populist consequences can reach beyond Europe. Populist leaders have claimed the Western liberal order doesn’t work for them and their desire for increased sovereignty, and often circumvent or disregard these established principles. The fact that they actively use other features of this system such as the global financial markets to grant them access to funds without which their countries could not survive suggests these populist leaders have not yet comprehended the interwoven nature of the international system. Selecting only those parts that benefit you while rejecting the rest will result in losing these benefits and in the collapse of a political structure that took decades to build.

Paula Ganga was the Skalny post-doctoral fellow for the 2018-2019 academic year.