Zoltan Ádám will present a new paper that discusses Hungary's democratic breakdown after 2010. He will argue that this breakdown was caused by the same factors that resulted in Hungary’s remarkable political stability and economic development in the previous two decades. At the dawn of the post-communist transition, Hungary adopted a highly centralized political system, with exceptionally strong institutional safeguards, protecting political stability.
Governments were insulated from short term political pressures to help them carry out unpopular economic reforms. The result was an economically efficient, but socially exclusive transformation, that demobilized a large part of society, both economically and politically. Their consent was bought by fiscal transfers in a traditional democratic populist way, creating unsustainable high public debt by the mid-2000s.
Fiscal stabilization amidst the global financial crisis de-legitimized liberal democracy, and Viktor Orbán – then leader of the opposition – obtained practically unlimited power in 2010. Examining the differences between democratic and authoritarian populism, the paper contributes to the populism literature with an emphasis on institutional endowments, and joins the debate on the political economy of authoritarian populism.
The paper has two main conclusions. First, fiscal profligacy on the long run is likely to undermine political support for liberal democratic institutions. Secondly, although inclusive, complex political institutions may slow down – or under certain conditions even prevent – thoroughgoing economic reforms, they are better suited to promote democratic development.