Although the wave of extremism did not fully materialize in the recent European Parliament elections, the far right fared well in Italy, Austria, Germany, and especially France. Those latest successes come after major shifts toward far-right parties in Hungary, Italy, Austria, the Netherlands, and Sweden, among others. (...)
On the one hand, there is nothing new here. We already knew that democracy around the world is increasingly under pressure and facing increasing challenges from authoritarian parties. Studies show that an increasing part of the population is losing confidence in democratic institutions. However, the penetration of the extreme right among younger voters is particularly worrying. Now, no one can deny that this last election was a wake-up call. If, however, we do not understand the root causes of this trend, efforts to protect democracy from institutional collapse and extremism are unlikely to bear fruit.
A simple explanation for the crisis of democracy throughout the industrialized world is that the results the system has achieved have not lived up to their promises. In the United States, real (inflation-adjusted) incomes at the bottom and middle of the distribution pyramid have barely risen since 1980, and elected politicians have done little about it. Similarly, in much of Europe, economic growth has been weak, especially since 2008. Although youth unemployment has recently been lower, it has long been a major economic problem in France and several other European countries.
The Western model of liberal democracy was supposed to bring jobs, stability and high-quality public goods. It mostly succeeded in this after World War II, but since the beginning of the 1980s it has failed to meet expectations on almost all levels. Policymakers from both the left and the right continued to promote policies designed by experts and implemented by highly skilled technocrats. But these policies not only did not bring common prosperity but also created the conditions for the financial crisis of 2008, which finally removed the remnants of the facade of success. Most voters concluded that politicians care more about bankers than workers.
My joint work with N. Eisenman, CG Aksoy, M. Fiszbein, and Carlos Molina shows that voters tend to support democratic institutions when they have direct experience that they deliver economic growth, non-corrupt government, social and economic stability, public services, and low inequality. It is therefore not surprising that failure to meet these conditions leads to loss of support.
In addition, even when democratic leaders focused on policies that would contribute to better living conditions for the majority of the population, they were not good at communicating effectively with the public. For example, pension reform is clearly needed to put France on a more sustainable growth path, but Macron has failed to secure public support for the solution he has proposed.
Democratic leaders are increasingly losing touch with the population and its deeper concerns. In the French case, this partly reflects Macron's dominant leadership style. But it also reflects a broader decline in trust in institutions, as well as the role of social networks and other communication technologies in promoting polarizing positions (both left and right) and pushing large sections of the population into ideological echo chambers.
Policymakers and mainstream politicians have also been somewhat deaf to the forms of economic and cultural turbulence brought about by large-scale immigration. In Europe, a significant portion of the population has expressed concern about mass immigration from the Middle East over the past decade, but centrist politicians (especially leaders from the center left) have been slow to act on it. This created a great opportunity for fringe anti-immigration parties like the Sweden Democrats and the Dutch Freedom Party, which then became formal or informal coalition partners of the ruling parties.
The challenges impeding shared prosperity in the industrialized world will become even more problematic in the era of artificial intelligence and automation—and even at a time when climate change, pandemics, mass immigration, and various threats to regional and global peace are growing causes for concern.
But democracy is still the most prepared to deal with these issues. Historical and current evidence clearly shows that non-democratic regimes are less responsive to the needs of the population and less effective in helping vulnerable citizens. Whatever the promise of the Chinese model, the evidence suggests that undemocratic regimes in the long run - reduce growth.
Therefore, democratic institutions and political leaders will have to rededicate themselves to building a just economy. This means prioritizing workers and ordinary citizens over multinationals, banks and global interests, and strengthening trust in a reasonable form of technocracy. Alienated leaders, politics in the interests of global companies, all that is no longer possible. To solve the problems of climate change, unemployment, inequality, artificial intelligence and the disruptions caused by globalization, democracies need to combine expertise with public support.
This will not be easy, as many voters have lost confidence in centrist parties. Although the extreme left - represented in France by Jean-Luc Mélenchon - seems more credible than traditional political forces in terms of commitment to workers, as well as independence from banks and global business interests, it is unclear whether left-wing populist policies would produce the kind of economy voters want.
This is a signal for the way forward for centrist parties. They could start by affirming that they reject blind loyalty to global business and unregulated globalization and offer a clear, workable plan for combining economic growth with reducing inequality. They should also strike a better balance between openness and reasonable restrictions on immigration.
...The previous way cannot continue. For democracy to regain public support and trust, it will have to do more for workers and equality.
The author is a professor of economics at the Massachusetts Institute of Technology (MIT).
Copyright: Project Syndicate, 2024. (translation: NR)
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