Populism in less developed countries is somewhat different

Our understanding and response to the populist challenges need to be suitably differentiated, a fact which seems to be overlooked in the large and growing flurry of writings on populism

The ill-defined term ‘populism’ is used in different senses not just by common people or the media, but even among social scientists. Economists usually interpret it as short-termism at the expense of the long-term health of the economy. They usually refer to it in describing macro-economic profligacy, leading to galloping budget deficits in pandering to all kinds of pressure groups for larger government spending and to the consequent inflation — examples abound in the recent history of Latin America (currently in virulent display in Venezuela). Political scientists, on the other hand, refer to the term in the context of a certain widespread distrust in the institutions of representative democracy, when people look for a strong leader who can directly embody the ‘popular will’ and cut through the tardy processes of the rule of law and encumbrances like basic human rights or minority rights. Even though I am an economist, in this article, I shall mainly confine myself to the latter use of the term.

This kind of populism now raging in many parts of the world has often been portrayed by a broad brush, with pointers to common factors behind the rise of Trump in the US, Orban in Hungary, Brexiteers in the UK, Putin in Russia, Kaczynski in Poland, Babis in the Czech Republic, Erdogan in Turkey, Modi in India or Duterte in the Philippines. There are indeed several common factors that apply to these cases, like widespread anxiety from job insecurity, a surge of ethnic nationalism that tries to legitimise majoritarian repression of minority rights and due process, a hankering for supreme leaders offering seductively simple solutions to complex problems, and so on. For my take on the commonalities in our understanding of the populist challenges all over the world, you may look up this article in the Boston Review.

But these portrayals often overlook some special characteristics of developing-country populism which are qualitatively different from those in rich countries. Keeping this in mind may help in calibrating a nuanced response to the populist challenge in different cases.

It is common, for example, to see finger-pointing at the backlash to globalisation. But if one takes the whole range of countries across continents, there is certainly no worldwide rebellion against the forces of globalisation. A survey of 18 countries (reported in November 2016 in The Economist magazine) suggests that the majority of respondents are quite positive on globalisation in Vietnam, the Philippines, India, Thailand, Malaysia, Denmark, Hong Kong etc (if China were included in the survey, probably it’d have been in the same list). Support for globalisation is low in the US, France, Britain and Australia. What we see is the expected fallout in rich countries from the decline in their more than century-old domination in international trade and investment and the growing assertiveness and weight of developing countries.

Similarly, for obvious reasons immigration is a searing divisive issue mainly in Europe and the US. Developing countries usually lobby for the relaxation of immigration restrictions in rich countries. (But even in the latter countries the issue raises its ugly head from time to time — witness the tension right now in Assam in northeast India where a right-wing government is trying to disenfranchise supposedly illegal Muslim immigrants from Bangladesh and around the more well-known case of the Rohingyas in Myanmar).

Most survey evidence also suggests that populist support in rich countries is stronger among the older, less-educated, blue-collar workers, and more in the rural backwaters than in the prosperous cities. The dividing line between the socially liberal professionals and the more conservative low-skilled workers is quite sharp, and the latter have resented the dominance of Blair-Clinton-like leaders in social-democratic parties who have been close to the corporate elite. The picture is somewhat different in developing countries. Many of the supporters of the populist leaders in India or Turkey are from the rising middle classes, from the aspirational youth, and at least as much from urban areas as from rural. In India, Pakistan, Indonesia, Turkey, Poland or Russia, symbols of illiberal religious resurgence have been used by the leaders to energise the upwardly-mobile or arriviste social groups.

Illustration by Binay Sinha

The anti-elitism of the populist forces also takes somewhat different forms. In rich countries the emphasis is on the growing distance common people feel from the bureaucratic governing elite (in say, Washington DC or Brussels) and the perceived loss of control and autonomy of local communities. In developing countries, the strong leaders have actually centralised power with popular acclaim, in the process weakening local autonomy. There the populist anger is more often directed at corruption of the established politicians in cahoots with business interests — the populist leaders harvest this anger in Brazil, Peru, Central America, Russia, Turkey, Pakistan or India.

The masses in their impatience with institutional rules and procedures are often complicit in their leaders’ systematic undermining of the institutional insulation or independence of the judiciary, police and the civil service in countries where these institutions are already weak. Government investigative agencies are often abused to harass opponents, and unscrupulously motivated raids by tax authorities against political adversaries of the populist leaders are cheered on by the public, often in clear violation of civic norms. The focus is on maintaining the façade of winning elections through ethnic-majoritarian mobilisation while decimating essential democratic institutions, not to speak of outright rigged elections in some cases.

In developing countries, the informal sector is often very large, and so massive numbers of workers there remain outside the pale of traditional trade union or class politics and the discipline labour organisations have historically exercised in taming nativist passions. These unorganised workers are thus more easily subject to the ethnic or sectarian fury whipped up by demagogues. In fact, in many poor countries the unionised public sector employees in the delivery of public services have often been callous, corrupt or truant, and so they currently do not have a good image with the poor recipients of such services. Religious or sectarian organisations which often step in to supplement these services are more popular. Under the circumstances what kind of corrective actions labour organisations and social movements can focus on is discussed in my piece on a global agenda for labour. 

Appeasing blue-collar workers with redistributive policies like minimum wages is often of limited relevance when the formal sector is small. The majority of informal workers are self-employed in small, often family, enterprises and they are more concerned about help in credit, marketing and general welfare policies.

Unlike in the US, in developing countries the right-wing parties are usually not opposed to pro-poor welfare policies. Even Modi, who at the time of the last national election in India had fulminated against what he called the policy of ‘doles’ of the earlier Congress-led government, has, after coming to power, generally refrained from seriously undermining the major pre-existing welfare programmes. Even in central Europe some of the extreme right-wing parties (like PiS in Poland or AfD in eastern Germany) are avid supporters of the welfare state. In Pakistan the newly elected leader Imran Khan, an ex-playboy turned devout, has called for a ‘Medina-like Islamic welfare state’.

Beyond welfare policies, both left and right-wing parties in poor countries favour economic populism that takes the form of various government subsidies and handouts. Several years of low international commodity prices, by keeping domestic inflation under control, have suppressed their adverse consequences, though this may not last long in the near future.

Another likely short-lived phenomenon in the poor countries may be their generally pro-globalisation attitude that we have referred to before. Their main source of comparative advantage in world trade is based on low labour cost. Over time, labour costs, as a dwindling part of total production costs, will be less of a decisive factor in determining patterns of trade. Particularly when it comes to high-valued products, factors like advantage in logistics, branding, broadband connectivity, infrastructure (both physical and digital), flexibility of production process, quality of credit and judicial institutions, and other such current rich-country advantages are already leading to what is called “reshoring” in world markets. Without large effective programmes of skill formation and vocational training, the political consequences for poor countries with masses of young people frustrated in their job prospects, as the traditional sectors like agriculture where they and their parents had been employed before decline, can be downright ominous. This may in time provide more fuel (and storm-troopers) for the demagogues.

Our understanding and response to the populist challenges thus need to be suitably differentiated, a fact which seems to be overlooked in the large and growing flurry of writings on populism.

(The article was first published in the international blog 3 Quarks Daily)

The author is Professor at University of California, Berkeley. His most recent two books are Awakening Giants, Feet of Clay: Assessing the Economic Rise of China and India and Globalisation, Democracy and Corruption: An Indian Perspective