Finance: Research, Policy and Anecdotes

Recent elections and referendums have been casted as a choice between establishment and populism.  As more and more evidence suggests, these contests have been partly influenced by outside forces interested in undermining democracy through social networks and fake news.  But there is another problem with these contests and that is what populists do with their wins.  Strong democracies are characterized by amicable change in power; today’s winner can be tomorrow’s loser.  Looking at the reaction of some of the successful populist politicians (which includes the Leave campaign) one wonders whether they play by the same rules.  The governments of Hungary and Poland have shown clear authoritarian tendencies, trying to undermine the independence of institutions such as the Central Bank and the judiciary, but also waging a more general war against non-conformist civil society, including the academic world.  Exhibit A: The Orban regime closing the Central European University, under the pretence that it was funded from abroad, as they dislike its main funder, George Soros.

And the most recent exhibit in the UK:  MP Chris Heaton-Harris writing to universities asking for names of academics teaching on Brexit and asking for the course material.   While one might think of this as innocent inquiry, the fact that the MP did not just ask for course material but in the first instance for the names of the academics makes this a rather chilling request!   And this comes on top of a campaign by the Morduch press against anyone critical about the consequences of Brexit (e.g., Bank of England governor Mark Carney) branding them as Enemy of the Brexit (or if they dare to hold up the constitutional framework, as the Supreme Court did, Enemies of the People) and calls by Tories for more patriotic reporting by the BBC. 

I have a strong belief in the strength of democratic institutionality of the UK (and definitely more than in the case of some Central European countries). However, these are scary trends.  It also puts the idea in perspective to let the populists show their incompetence by having them win elections and forcing them to govern.  We have to be careful what we wish for.  The spectacle from the other side of the Atlantic where the president is trying everything possible to undermine 200 years of democratic institutionality should be a warning sign.  Democracy has not only to be achieved, it has to be defended. 

Overview