Economic Adjustment and Political Transformation in Europe

• In Event: ‘Populism in Europe’ or ‘Populism and Europe’? Causes and Consequences

Abstract

Politics has moved from parties of mass integration, through catch all parties, to cartel parties, to increasing fragmentation. Markets have moved from capital controls and embedded liberalism, to free capital movements and macroeconomic imbalances. These two movements seem to run in parallel even if they are not connected. Political elites have lost control over their supporters and economic elites have lost control over market forces. Now a different group of would-be elites is promising to take back that control. As part of that promise, they vow to strengthen political and economic institutions. The question is whether the program they offer is capable of delivering superior economic outcomes and whether it is consistent with democratic norms and values. There is strong reason to believe that economic performance will worsen rather than improving and that the control these new elites promise and the procedures for democratic accountability are incompatible. This discussion explores that potential incompatibility through case studies from Europe and North America. The goal is to show how similar developments are taking place in very different institutional environments and to consider the implications for economic performance, democratic stability, and European integration.

Author

• Erik Jones, Johns Hopkins University