Ngaire Woods is the inaugural Dean of the Blavatnik School of Government and Professor of Global Economic Governance. In December 2016 she visited the EUI to deliver a Max Weber Lecture on globalisation and the backlash against democracy. George Papaconstantinou is a Greek economist, author and former Minister for Finance under the Papandreou centre-left government formed in 2009. He visited the EUI in November 2016 to discuss his new book, ‘Game Over’.
A little under two hundred years ago, Alexis de Tocqueville crossed the Atlantic, from France to the United States, to study a radical new political system. ‘Time has not yet shaped it into perfect form: the great revolution by which it has been created is not yet over,’ he wrote. For although it had ‘but just come into existence,’ the future belonged to democracy. At the dawn of 2017, this future is in question.
Nowhere is the health of democracy more obvious than in the leaders we choose. For whilst democratic institutions still stand, populists have made electoral gains by blaming people’s diminishing entitlements on foreigners, immigration and globalization. ‘A sinister tone is taking hold in the mainstream on this continent,’ warns Professor Ngaire Woods. Across Europe, populist and xenophobic rhetoric has become all too familiar. ‘In the face of this global backlash [against democracy],’ Woods says ‘politicians across the world are grabbing three easy but toxic tools — anti-globalisation, nativism and direct democracy.’ With ‘The Donald’ in the Oval Office, the path to Brexit well underway, and continued success forecasted for European populists in the year ahead, Professor Woods is not the alone in thinking that ‘we are living in very worrying times.’ So what caused this backlash against democracy?
Many blame the surge in populism on globalisation. Indeed, a ‘globalisation of opportunity,’ as Professor Woods describes it, has not been followed by a ‘globalisation of responsibility.’ As is so eloquently described in J.D. Vance’s Hillbilly Elegy, globalisation has brought changes in the labour market which have alienated working class citizens. Yet, although ‘a sense of injustice is part of [the democratic backlash], let’s not over-read economics into it,’ Woods argues. The real disenfranchisement of the American ‘rust belt’ or the former-industrial heartlands of northern England, expressed through populist voting patterns in 2016, is political, not economic. ‘Globalisation is not killing democracy,’ says Professor Woods, ‘it has much more to do with politics.’
More specifically, Professor Woods lays much of the blame for the populist backlash at the door of democratic leaders themselves. The backlash can be explained, she argues, by ‘the weakness of democrats, not the strength of populists’. According to Ngaire Woods, the ‘tsunami’ of referenda in 2016 is evidence of such weakness. ‘A politician who resorts to referenda to know what the people think is already a failed politician,’ she says. ‘There are so many other ways to know what citizens want.’
Since the financial crisis hit Europe in 2008, many governments across the continent have struggled to deal with the consequences. Woods argues that, in the years since, the weakness of democratic leadership has become apparent. She says the political handling of Eurozone bailouts proved that leaders were out of touch with European citizens. ‘Leaders have been moving much faster than their populations towards integration,’ she said ‘I was following the Eurozone crisis very closely, and the gap between popular debates about a real questioning of the EU’s legitimacy in the Southern European countries in the throes of the Eurozone crisis, and policy-makers in Brussels talking about financial union and fiscal union felt like a gap that was unbridgeable.’
That gap which Woods observed in 2008 is still present today. Leaders in Brussels ‘are not looking at the 46.6% of Austrians who just voted for the Freedom Party or the fact that Marine Le Pen has consistently been the only French politician polling in the double digits,’ Woods warned. ‘If you are going to lead, you need to be right in the middle of a group, to mobilise them,’ she said. Yet the shock of Brexit and the anti-establishment, anti-immigration discourse which continues to dominate political news-cycles suggests that democrats are failing to connect with their electorates.
According to Ngaire Woods, the gap has grown because poor leadership decisions eroded trust between leaders and citizens. ‘Politicians in Germany and France were not honest about the fact that, in the first years of the crisis, they were bailing out German and French banks,’ she recalls. ‘They either had to say, ‘we’re bailing out our own banks’ and deal with public ire about that, or they had to say ‘we’re helping our neighbours, and we have to do that for the European project to survive.’’ Many chose the latter. And whilst this lack of honesty may have made sense at the time, Woods argues it is an example of bad leadership, ‘opportunism, discontinuity and short-termism’.
As a result of the narrative leaders in northern Europe employed, workers now feel more aggrieved about helping others in the Eurozone, rather than seeing it as a collective burden. The choice of narrative was ‘a fairly invidious one, ’ Woods admits. But on balance, ‘I think you are better always to put the truth in front of the public; you owe that to them,’ she says. ‘People will trust you if you have a vision which is selfless, if they can judge that you will be competent, and that you will be fair. Those three qualities are absolutely essential,’ Woods asserts.
Yet honesty is also a dangerous strategy. One politician who took the risk was George Papaconstantinou. The former Greek Minister of Finance came into office to discover that, as Woods notes, ‘the predecessor government had very corruptly cooked the books.’ Woods notes that the decision of Papaconstantinou’s boss, PM Papandreou faced was remarkably difficult. ‘He had to decide whether or not to tell the public straight away that Greece was bankrupt, or to try and keep it hidden whilst he came with a plan. That’s a tough choice, because by going public you catalyse the crisis,’ she said.
Indeed, the consequences of how it was managed have been long-lasting, both personally for Papaconstantinou and for Greece. In November last year, George Papaconstantinou, the Greek Finance Minister who came clean with the true fiscal situation and signed the first Greek bailout , spoke to EUI Times about his time in office. ‘We had a state that didn’t know how much it spent and where. We realised early on that the crisis would be severe and that there would be a number of difficult years, but we had no idea how long it was going to take or how deep the recession was going to be.’ On a personal level, Papaconstantinou was vilified for his austerity measures, and as a country Greece has not yet recovered. ‘Much has been repaired, but at a huge cost,’ the former Minister said. ‘Some of the aspects that were awakened during the crisis such as populism are, I’m afraid, here to stay. From the Golden Dawn neo-Nazis to extreme left parties who were barely entering the parliament and are now in power,’ he said. Nonetheless, this politician believes the sacrifice was worthwhile. ‘Greece has not saved itself yet. It has hopefully created a more viable future for itself, once it manages to get out of the crisis.’
On balance, Papaconstantinou and Woods agree that honesty is the best policy to mend the backlash against democracy. ‘We still need to invest heavily in serious institutional reform, to make the state more representative, more open, more accountable,’ Papaconstantinou said, emphasizing the need for transparency amongst political leaders. ‘The political system simply needs to be more accountable to citizens,’ he continued. Similarly, for Woods, the renovation of democracy depends on renovating the relationship between leader and citizen. ‘The fundamental question is, ‘what do leaders do?’’ Woods insists. The leader of an international organisation once said to me, ‘I’m leading but nobody is following!’ Leaders can’t be effective unless they do both those things, and to build a following, you have to cultivate trust.’