Explaining Orbán: A political transaction cost theory of authoritarian populism

Ádám, Zoltán (2019) Explaining Orbán: A political transaction cost theory of authoritarian populism. Problems of Post-Communism . pp. 1-17. DOI

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Based on the theory of transaction cost economics, the paper argues that by vertically organizing political exchange, populist regimes reduce market-type political transaction costs – primarily bargaining, enforcement and information costs – prevalent in democracy. However, management-type political transaction costs – mainly organizational costs, partly stemming from corruption – rise as populists in power leverage government control through hierarchically organized clienteles. Operation of such clienteles is costly as maintaining them takes political and economic resources, including a corruption surcharge that government cronies are allowed to appropriate while accessing public resources. Transaction cost economics suggest that a shift from democratic towards authoritarian populist regimes occurs when formal and informal political institutions prove unable to maintain horizontal political exchange, and society seeks to internalize market-type political transaction costs through increased government discretion. Institutionally, this is based on a majoritarian approach to power, sidelining the system of checks and balances that constrain democratic governments. This is demonstrated on the example of Hungary that has turned into a textbook case of authoritarian populism under Viktor Orbán since 2010.

Item Type:Article
Uncontrolled Keywords:authoritarian populism, Hungary, political exchange, political transaction costs, Viktor Orbán
Subjects:Political science
ID Code:4248
Deposited By: Veronika Vitéz
Deposited On:27 Sep 2019 11:49
Last Modified:27 Sep 2019 11:49

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