The Institutional Economics Approach to Populism: Precising the Theoretical-Methodological Framework

Abstract

This work follows up on Zoltán Ádám’s similarly titled article presented and published at the International Economic Forum on Reform, Transition and Growth of the Corvinus University of Budapest. It undertakes the same effort of investigating the question of what populism is and how it may be conceptualised in the institutional economics context. However, this work arrives at rather different findings. It brings in a broader range of literature on populism studies and connects them through electoral behaviour to institutional economics. For more contrast, it also applies the same case study method Ádám uses focusing on post-communist Hungary. As a result, with identical transaction cost considerations, this paper makes the case that instead of a “a form of government that reduces political uncertainties inherently present in liberal democracies”, more feasibly, populism is a political behaviour – a strategy utilised by political actors aimed at reducing political and economic competition. The work demonstrates how this conceptualisation makes more precise operationalisation and analysis possible by re-interpreting Ádám’s analysis of Hungary’s post-transition political economy; and concludes with proposing novel considerations of populism as a universal, global political economic phenomenon.