Economic Instability Endangers Democracy

A women holds an American flag while protesting outside Trump Tower during a demonstration organized by the New York Immigration Coalition against President-elect Donald Trump in the Manhattan borough of New York

The world’s leading consolidated democracies have seen rates of economic growth consistently and persistently decline over the past forty years.

The newest and most upsetting aspect of this is the creeping growth of regime destabilization out beyond low- and middle-income countries. Prior research and data from the post–1945 global era once reassured us that rich, consolidated democracies have no history of authoritarian reversion. There was even a specific, comforting Per Capita GDP number, a Maginot Line over which democracies don’t fail—roughly $10,000. But Turkey’s recent purges of opposition influences and constitutional changes arguably make it the richest democracy ever (at $10,975 USD per capita) to fall into an authoritarian reversion. Even within the borders of the European Union, the leaders of the ruling Fidesz party in Hungary (per-capita GDP in 2016: $12,664) have instituted drastic changes to the electoral system to favor minority rule. Hungary’s economic history corresponds to our economic decline hypothesis: after averaging GDP growth of 2.7 percent between 1992 and 2006, the country followed a deep 2008 recession with stagnation, averaging 0.7 percent growth over the following decade (per the World Bank’s data). Since Victor Orban’s election in 2010, Hungary has fallen from a rating of “1” on Freedom House’s seven-point scale of political and civil liberties to a “2.5”, the lowest score still qualifying as a “free” country, with the real chance of further decline. Not every recent case of authoritarian reversion follows this economic pattern, but it is a clearly established pattern, and it is no longer clear how much immunity is conferred by a nation’s wealth.

Some indicators used to assess the health of the international order, such as global supply chain integration, cross-border financial flows, and the continued membership of the United Nations, remain fairly stable. The liberal order and globalization are not the same thing, and the latter can deepen even as the former is weakening. The “twin insurgencies” find it useful to move money and goods between countries, and so do ordinary human beings. The economic foundations of the global order, while separately vulnerable to financial disorder, can also coexist with economic stagnation. The unraveling of the elements of global order, in other words, will occur not in all domains at once, but first in civil and political liberties.

Authoritarian reversion has yet to dominate the metrics of world governance, which inevitably pushes formal evaluations of global democracy tread carefully instead labeling the current state of affairs a genuine crisis. But the point where we would clearly demarcate a crisis, such the point where authoritarian reversion visits the world’s consolidated democracies is a point that is far too late to sound the alarm. The sources of and solution to global economic rich-nation stagnation are beyond the scope of this essay. However, the “canaries in the coal mine” for global democracy that Americans see today are an appropriate moment to take powerful measures to preserve the American system of governance.

Jordan Willcox works as a defense analyst at the RAND Corporation, and follows macroeconomics and disorganized behavior research in his spare time, while tweeting at @noosphereintern.

Image: Reuters


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