Hungary
Orban and the populist paradox
Orban and the populist paradox
He has inspired MAGA culture warriors in America and nationalist populists in Europe. But after 16 years in power, Viktor Orban conceded defeat. The main reason was the abysmal state of the Hungarian economy.
Once the darling of foreign investors after the Cold War, Hungary is now one of the poorest countries in the European Union. Economic growth last year was just 0.4 percent. Unemployment is at a 10-year high.
It’s not a coincidence that Hungary is the most corrupt country in the E.U., according to Transparency International. (It shares that ranking with Bulgaria.) That corruption, which voters voiced their disgust with last weekend, has hollowed out the country’s economy.
It’s also no coincidence that all of this happened on Orban’s watch.
During his time in power, he became the global guru of “illiberal democracy,” a system of extensive political control over Hungary’s institutions, including the judiciary and the media.
That system came at a steep economic price: Government contracts went to companies based on political loyalty, not skills or economic efficiency. Corruption and cronyism, in other words, were integral parts of Orbanism.
Long a model for like-minded movements, Orban’s Hungary is also a case study of what results from an unrestrained executive and the systematic dismantling of the rule of law.
In these models, “politics are more important than the economy,” said Ivan Krastev, a political scientist who has written extensively about populist regimes. “The aim is to control everything. And as a result, the economy pays the price.”
A ‘golden age’ falls short
After Orban’s last election victory in 2022, he promised a “golden age” for Hungary’s economy.
It didn’t turn out that way. The statistic that most caught my eye was the incredible decline in Hungarian productivity growth since Orban took power. In the decade leading up to his first election, it averaged 2 percent. In his first decade in power, it dropped to 1 percent. Since 2020, it has averaged only 0.2 percent, E.U. statistics show.
How did this happen?
There’s a well-established pattern that some have called the “populist paradox.” Some populist leaders win on promises to drain the swamp and fight corruption. Then, once in power, they chip away at the institutions that help guard against corruption, while using it to entrench their rule.
This played out in Hungary. Orban stacked courts and once-independent government agencies with loyalists. He took control of media outlets. In 2014, he baptized this construct “an illiberal state.”
Eventually, this “illiberal state” took its toll on the economy.
I spoke to Krisztian Orban (no relation), an economist who has closely followed the impact of Orbanism. He told me that Orban’s model extended deep into the private sector. Lire la suite »
Hungary is no longer a full democracy, says European parliament
MEPs back resolution stating country led by Viktor Orbán has become ‘hybrid regime of electoral autocracy’
Hungary can no longer be considered a full democracy, the European parliament has said in a powerful symbolic vote against Viktor Orbán’s government.
In a resolution backed by 81% of MEPs present to vote, the parliament stated that Hungary had become a “hybrid regime of electoral autocracy”, citing a breakdown in democracy, fundamental rights and the rule of law.
While the vote has no practical effect, it heightens pressure on EU authorities in Brussels not to disburse billions in EU cash to Hungary that is being withheld over concerns about corruption.
Hungary is battling to persuade the European Commission to release €4.64bn in Covid recovery funds, frozen for more than a year. Budapest is also trying to stave off a separate legal procedure that could lead to deductions from €24.3bn of cohesion funds, money for infrastructure and economic development.
The European Commission is expected to propose cutting 70% of Hungary’s cohesion funds on Sunday, but will also open the door to a compromise, according to two MEPs familiar with discussions. “More or less what we hear is that the commission will propose … these sanctions or financial measures,” said Moritz Körner, a German MEP, who has been briefed by the commission.
In a recent internal paper, commission officials suggested there was a “very significant” risk over Hungary’s management of EU funds, citing breaches in public interest rules and an unusually high number of contracts awarded to a single bidder – a red flag for transparency watchers. The paper, which has been removed from the commission’s website, suggests a 70% cut in funds as “proportionate” to the risk.
Hungary will be given until mid-November to get its house in order. After a charm offensive in Brussels, Hungary’s government is expected next week to propose a raft of laws to combat corruption. Critics fear the commission is ready to accept cosmetic changes to defuse the conflicts over EU funds.
“The commission has made a half-hearted deal with the Hungarian government on the kind of change they want to see,” said Daniel Freund, a German Green MEP, also briefed on the commission’s plans. “There is a very short timeframe and … to expect that the damage that Orbán has done with [his] constitutional majority over 12 years, can now be repaired in a matter of weeks, or a couple of months, I think is optimistic to put it mildly.”