Institutions are withstanding Trump, but it is America’s systemic problems which are the real threat to democracy.
By Hadas Aron
I was recently included in this NYT piece on the comparative politics view on the future of democracy in the US. I argued, as we previously wrote here, that the comparison between the US and weak democracies is not helpful, as American institutions are resilient, and President Trump's actions have been challenged at every step.
We will shortly have another post elaborating on this issue and raising other more significant challenges to US democracy.
By Hadas Aron & Emily Holland
Image Credit: BBC
Our new(ish) project on populism and foreign policy aims to find out the degree to which populists have a significant influence on foreign policy. Do populists make the radical changes their rhetoric would suggest, or is it simply that the system is changing (due to structural forces like globalization, automation, and the decline of American hegemony) and everyone, populists and non-populists alike, are simply adjusting to this transformation? We will be writing about issues related to this project here on the blog and in other outlets in the coming weeks.
One interesting finding resulting from our forthcoming paper on populism and foreign policy is that in the arena of international economic policy, populists target specific economic programs that were adopted in the 1990s under the Washington Consensus. The Washington Consensus, a prescribed set of economic policies that the IMF and other international institutions imposed on developing countries, included privatization, reduction of trade barriers and barriers to investment, tight fiscal policy, and deregulation.
Populist foreign policy is often characterized as protectionist, but in fact populists in government target privatization and deregulation more than any other aspect of liberal economies. Hungary, Argentina, and Bolivia all nationalized their pension systems and restricted foreign ownership of private land under populist governments. Argentina expropriated large components of its energy sector, and Bolivia nationalized it altogether.
Populists target privatization and related policies for two reasons. First, expropriation or nationalization of different sectors can be profitable for the government-- in the short term. Populists use this revenue to secure their popularity through programmatic or clientelistic transfers to certain sections of society. In some cases they also buy the loyalty of influential political or business stakeholders. This revenue is also needed because, as demonstrated by several Latin American cases, populists tend to inflate state budgets-- against Washington Consensus directives. In Europe, states have more budgetary constraints, but newer EU members likw Hungary and Poland are able to use EU transfers as extra budgetary funds to pursue short-term goals.
Second, for many populists, reversing privatization can garner political capital. The privatizations of the 1990s were, and continue to be, controversial at best. They are perceived by many as a source of economic insecurity, inequality, and the breakdown of social solidarity. Many people in relatively new democracies view privatization as an imperialist policy forced upon their states by international bureaucrats representing the interests of great powers. Politicians who implemented these policies were often later characterized as collaborators and paid a political price.
Our research supports the findings of scholars like Dani Rodrik, who broadly view populism as a response to globalization. We, however, narrow in on specific 1990s era reforms as the focal point of popular discontent and populist mobilization. One implication of this is that populism will be much more politically salient in third wave democracies that went through a process of enforced liberalization. Scholars have long pointed out the devastating consequences of “shock therapy” liberalization programs in Russia and others. In Russia, the most prominent example, output fell by half and unemployment rose from 2% to over 40% ahead of the 1998 Russian financial crisis and ruble collapse. Pensioners’ life savings were wiped out for the second time in that decade, and the result of the two-decades long transition was a huge increase in both poverty and inequality, as the benefits of liberalization went to select few--the oligarchs. The result of this sudden and profound economic insecurity is often ignored by the West, but has serious implications for today’s political realities. Russia, as well as many other states who underwent Western-led liberalization processes in the 1990s, today face issues including demographic crisis due to mass emigration and significantly reduced life expectancy, the breakdown of families and social structures, and finally a devastating political shift. But even in societies that did not experience the 1990s as an outright disaster, some still view the period as traumatic.
Those of us who grew up in (more or less) Western countries in the 1990s were indirectly influenced by concepts including the “end of history”, the notion of the victory of liberalism and its associated global benefits. Indeed, liberation from oppressive regimes around the globe was an incredible 1990s phenomenon, as was its music. This week, as we celebrate the 30th anniversary of the fall of the Berlin Wall, it is especially important to remember the 1990s as an important moment for global democratic progress. But, as discussed above, it was not a rosy period for everyone, many former East Germans included. Left leaning liberals often view the early 1960s as a utopian age in Europe. Social democracy was thriving, welfare states were elaborate, traditional political parties and unions were strong, and politics was consensual. But of course, true consensus hardly exists in politics. In the 1950s and 60s this utopia only applied to privileged groups - women and minorities, of course, were excluded from the bargain. Similarly, the liberal 1990s utopia that many of us grew up in, was to a large extent a specifically Western condition (more open, but still not entirely inclusive to women and minorities). Many of the developing countries experiencing populism today had an entirely different 1990s experience, one that has been glossed over by the liberal tradition. Their grievances with the Washington Consensus and the sometimes devastating consequences of its associated policies is a narrative that is becoming increasingly prominent today.
Had the pleasure to appear on Uli Baer's wonderful podcast Think About It, for a very interesting conversation on populism and academic freedom.
You can listen to it here!
How Democracies Die, a book by Steven Levitsky and Daniel Ziblatt, has been garnering much attention in recent weeks. The book warns about the possibility of a slide into American authoritarianism and draws lessons from the collapse of democracies around the world. This new release is part of an ongoing debate on whether Donald Trump is a grave danger to American democracy. Levitsky and Ziblatt are noted political scientists, with decades of important scholarship on democratic and authoritarian regimes. While the global review of cases of democratic decline is thorough and accurate, the comparisons they draw with the American case is part of an increasingly hysterical discourse on American politics by liberal commentators. The cases Levitsky and Ziblatt employ shed little light on current developments in American politics, and they neglect to identify the crucial international shifts leading to democratic decline in vulnerable countries. The United States is a long-standing, consolidated democracy and is not in immediate danger of collapse. However, pointing out the global climate of democratic decline and accurately identifying its causes is an important task.
Read more at:
By Emily Holland and Hadas Aron
The 30-page indictment of Paul Manafort, President Trump’s former campaign manager, outlines the illicit schemes he used to launder the proceeds of his political consultancy firm. It outlines the financial tools he used to avoid taxes, and accuses Manafort of failing to register as foreign agent, despite making millions lobbying for a variety of foreign governments, including the now deposed pro-Russian former president of Ukraine, Viktor Yanukovych. While it is unclear how the revelations in the indictment will affect Special Council Robert Mueller’s larger investigation into Russian meddling in US politics, the Manafort scandal brings to light the type of high-level transnational corruption that is not only common, but rather the cost of doing business in most former communist countries of East Central Europe and beyond. Ultimately, the revelations raise questions about the penetration of transnational corruption into US politics, and on how well equipped American institutions are to curb it.
What differs however from the types of scandals common not only to Ukrainian politics but also Russian, Hungarian and beyond, is the fact that Manafort and Gates have been indicted, not because of volatile and retaliatory politics, but rather because of rule of law processes and institutions. How this case is handled will have very interesting implications for the question of what happens when this type of high-level transnational corruption reaches the West. Of course, US politics is not untouched by corruption—US campaign finance is in need of profound restructuring, and there is systemic corruption in government procurements—but the type of transnational corruption linking foreign governments to the highest level of US elected office is not business as usual in the US political system. While many in Trump’s base do not seem bothered by Russia’s meddling in our presidential elections, or by the implication that Manafort worked with Russian agents and oligarchs to help elect a pro-Moscow Ukrainian president, all Americans should be profoundly disturbed that this type of kleptocratic politics has reached Washington.
The Manafort indictment should be crucial reading for those seeking a better understanding of post-Soviet politics and their implications for global security, foreign policy, and now US domestic politics. The allegations detail in depth the various strategies and tools employed by powerful and wealthy individuals (oligarchs) to enrich themselves in terms of both money and power. The proliferation of new tools of financial globalization including shell companies, complex acquisitions, and off-shore tax havens have made it increasingly easy for wealthy and powerful individuals to profit off of the state and ignore sovereign borders. Moreover, these schemes highlight a disturbing consequence of this concentration of power: a lack of institutions and processes to regulate and oversee this type of behavior leads to profound political corruption that inhibits and stunts democracy.
Manafort’s involvement in Ukraine is a perfect example of the dangers of this type of behavior. Through byzantine dealings with a Ukrainian energy oligarch that had links to the Kremlin, Manafort helped secure a $10b loan from bankers connected to Putin to finance the presidential campaign of pro-Russian Viktor Yanukovych. Ukrainian politics, captured by oligarchs from almost the moment of independence, did not have the institutional strength to prevent this type of meddling. Moreover, while corruption scandals at the highest level are common in Ukrainian politics, impartial and apolitical arrests are uncommon. The fact that Manafort was indicted by an impartial special council highlights a fundamental difference between East and West: Western institutions are stronger and therefore may be better able to regulate transnational corruption.
Of course, the surprising election of Donald Trump and his disregard for inconvenient institutions raise concerns over whether the Trump era is bringing Eastern style power politics into the US mainstream. So far there are signs in both directions. Trump’s connections to people like Manafort along with the many unanswered questions in the Russia investigation are indeed troubling. There are legitimate concerns that any Trump infrastructure projects will be financed and procured á la Russe: enriching those close to the Trump regime on the taxpayer’s dime. On the other hand, recent investigations have shown that Trump’s presidency has complicated rather than facilitated business dealings for his son in law Jared Kushner. Certainly, Trump’s unwillingness to disaggregate his personal business dealings from his elected office as well as his reluctance to adhere to norms such as making public his tax returns shows at the very least a sympathy to the norms of the Eastern oligarchy.
While the indictment of Manafort is a sign that perhaps American oversight institutions are functioning, it is unlikely that Manafort would have been caught if he had not become entangled with Trump. This raises the question: how many more Manafort’s are out there, and are any of them dealing in American politics on behalf of foreign governments? Unfortunately, given the stake that Russia has in undermining American democracy, it is likely that Manafort is not unique. A close reading of the indictment shows a defiant and brazen attitude: it is clear that Manafort was not worried about covering his tracks. Perhaps because in comparison to the oligarchs he dealt with in the post-Soviet space, the FBI is relatively benign.
It is difficult to assess what the future holds for Manafort, and if his indictment is a signal that this type of high-level corruption is not tolerable in the American political sphere, the larger problem however, is that the deep endemic kleptocracy connected with a rise in right-wing populism is exceedingly difficult to contain. The case of contemporary Hungary shows the shocking speed with which democratic institutions can be dismantled in favor of rules that protect oligarchic interests. Ukraine offers a truly tragic tale of the dangers of endemic corruption that ultimately led to disintegration of the state itself. American institutions have a far longer liberal democratic tradition, but only time will tell if American institutions are strong enough to stand up to the powerful global force of transnational corruption.
By Hadas Aron and Emily Holland
Last week the Israeli Minister of Education introduced an academic ethics code that introduced certain limitations on expressing political views in the classroom. At first glance the code does not seem expressly harmful, it sets allows for the expression of political views and the discussion of controversial issues as part of the course syllabus. But certain aspects of the code are troubling to Israeli academics and students and led to much protest. The code is intended to “protect” students from the political views of professors, and sets up ethics councils where students can complain about the conduct of their professors. This sets up an atmosphere of suspicion and encourages professors to self-censor their treatment of controversial and political issues that are at the heart of many academic fields.
The introduction of this code comes with other measures that seek to limit civil society and track the funding of NGOs. Attempting to bring civil society and academia under the control of the government is part of a broader worldwide phenomenon that is connected to populism. Academia has been a central part of the liberal democratic world order for decades. Since the 1930s academics fled Europe for the US, creating what we now know as American academia and setting up the intellectual basis for post-war liberalism.
The new global populism aims to upend this order, both politically and ideologically. Practically speaking, populist leaders take measure to bring academia under their ideological control by limiting the academic freedom of previous generations and hiring new a generation of state-sponsored ideologues. In many countries academia is funded by the government, and so tactics that would be difficult in the US are much more successful in other societies.
One prominent example is the legislative attempt by Hungarian authorities to close the Central European University (CEU) in Budapest. The bill targeted foreign universities without a primary campus in their home country, but practically affected only CEU. While most Hungarian academia is already under the control of the government, CEU is independently funded and was designed as a beacon of liberalism in the region. As such, it was construed as an enemy of Viktor Orbán’s populist government and now may have to leave Hungary.
A far more extreme case is that of Turkey, where academics have been detained, suspended, and purged in one of the most brutal instances of curbing academic freedom and eliminating the role of academic freedom in society.
All of this is happening in an environment of increased nationalism and closing borders in the Western world. Traditionally, academia has been an extremely cosmopolitan sector. In many places, employment is not based on nationality but on expertise alone. As a result American academia served as a sanctuary for academics from around the world during difficult periods, in particular before and during World War II. The concern is that more stringent visa policies limit the choices available to academics and so would force them to comply with their home countries new academic guidelines. This joins a variety of policies that are breaking down the liberal world order, both materially and intellectually. While professors are often characterized as detached from the real world in ivory towers, academics have a fundamental role in shaping the ideational foundation of society.
By Emily Holland and Hadas Aron
In his inaugural speech last week, President Donald Trump blazed a clear path for his regime. “From this day forward, a new vision will govern our land, from this day forward, it’s going to be only America first. America first.” This was not the first time in recent weeks that Trump has displayed his vision for American protectionism and isolationism, breaking from the traditional world order set by the United States after World War II. In an interview with the Times of London on January 16, Trump expressed disinterest in the future of the European Union, stating, “I don’t think it matters much for the United States.”
For Europe, the new direction of American foreign policy is extremely consequential. Previously, a large part of Europe’s ability to act as a single bloc was the strength of its alliance of interests and institutions with the United States. The US-European alliance together pursued a global platform of democratization, liberal economic policies, multilateral action on issues of security and war, and recently even on environmental policies. This alliance defined the liberal world order as we knew it--until Friday. That is what makes the aspiration of the Trump presidency so radical.
Whether it is in the best interest of the US to preserve the historic policy of the liberal order including European integration, Bretton Woods, NATO and the United Nations is debatable. But the question arises: who benefits from destroying this order? When looking at Russian foreign policy in Europe over the past decade a pattern emerges. Moscow has consistently pursued a policy of “divide and conquer”—pursuing negotiations with individual states rather than face Europe as a single bloc. This strategy weakened Europe as an adversary and allowed Russia to pursue a number of strategic interests with relatively little resistance. Of course, part of the reason for Moscow’s success was not only its aggressive grand strategy also but the inability of the European Union to act coherently. But the outcome has been that Russia has been very successful in pursuing both its economic and security interests by dividing Europe into discreet units.
Russia was particularly successful in thwarting European Union efforts to create a union-level energy policy, which would have placed Europe in a much better negotiation position vis-à-vis Russia. Although Russia provides one third of Europe’s total energy needs, the degree to which states are dependent on Russian commodities and the price they pay for them varies widely, even between neighboring states. Moscow gives preferential treatment to some states in order to create a divergence of interest, breaking down cooperation across states. As a result, each country in Europe deals independently instead of as a union, which weakens their bargaining leverage and gives Russia a comparative advantage. A recent example was Germany’s refusal to comply with a Brussels initiative to increase transparency in natural gas contracts with Russia. Gazprom, Russia’s state owned gas conglomerate, charges German companies up to 2/3 less than it does neighboring Poland, which was in favor of the initiative.
On a political level, Russia has been sponsoring far right movements that promote Euro-skepticism and opposition to a single monetary zone. Part of the reason these parties disrupt European unity is that a large part of their electoral success is in the European parliament, where political competition is weaker and turnout is lower. Russia’s real foreign policy coup was that these parties, small as they may be, led to a rise in populism across the political spectrum. Leaders including Hungary’s Victor Orban, France’s Marine Le Pen and others support Russia’s worldview and seek increased economic and political ties. The rise of far right parties in Europe has also been associated with a rise in crony capitalism: a system that Russia fostered because it helps Moscow retain its economic and political foothold in former satellite states.
Unsurprisingly, these leaders also support Donald Trump. After hearing Trump’s speech, Orban heralded the “end of multilateralism” and said Hungary had “received permission from, if you like, the highest position in the world so we can now also put ourselves in first place.” This aligns perfectly with the rhetoric of leaders like Orban and Le Pen who depict their own countries history as a struggle for independence from foreign imperial powers. Trump and Orban’s speeches are Moscow’s greatest coup to date: breaking down the historic ties between the United States and Europe creates a system in which each country fends for itself and heralds the end of the “West” as we know it. In such a world, Russia is the big winner. Since the collapse of the Soviet Union, Russia lacked strong alliances and was persistently challenged by the West. Now, with the help of Donald Trump, a predatory country can legitimately prey on the weak.
Trump is often labeled as a Manchurian Candidate operated by Russia, but it is not only his business and alleged personal ties with Vladimir Putin that endanger American interests. Trump’s address shows that Russia’s divide and conquer strategy has found an ally in the White House. This has grave consequences not only for Europe, but also for the United States. It is naïve to think that Europe is the sole beneficiary of its alliance with the United States. Because of its once powerful alliance, the US set the terms for global trade and security for many years. Evidence from Europe shows that once countries are divided, they lose their power, and they lose it to Russia.