How Neoliberal Policies Have Led to the Crisis of Democracy


This crisis of democracy is the result primarily of neoliberalism. As financial markets have been deregulated over the past forty years, governments’ abilities to regulate their domestic economies and to expand social welfare programs have been undermined.

Democracy appears to be in crisis in much of the world. Since democracy, by definition, is the rule of the people, the best way to know the condition of democracy is to measure public involvement in politics. In most countries, especially the richest, the percentage of eligible citizens who vote is down significantly. Party membership is declining. The major parties are losing votes to smaller parties that take extreme positions and often appeal to jingoist or racist emotions. This polarizes politics and makes it harder for major parties to put together effective governing coalitions, or in presidential systems like the U.S. to pass legislation.

Polls show that the public in most countries has ever less confidence in the honesty and competence of their elected leaders. Even worse, citizens feel that their opinions have little effect on government actions. The government owned or regulated news organs have been replaced or now have to compete with privately owned media that sensationalize politics and pursue the agendas of their owners who often hold extreme rightwing views.

These are the symptoms of declining democracy in the West. In the Global South, many countries hold sham elections, ensuring that their leaders are ‘presidents for life’ in fact if not name. Today most countries profess to be democracies and hold elections, but there are fewer and fewer vibrant democracies. Why is this so?

This crisis of democracy is primarily the result of neoliberalism. As financial markets have been deregulated over the past forty years, governments’ abilities to regulate their domestic economies and to expand social welfare programs have been undermined. As governments deliver fewer benefits to their citizens and seem unable to protect workers from declining wages, unemployment, and periodic financial crises, voters lose faith in the competence of their elected officials and come to believe, with good reason, that their leaders are not serving the interests of the people who elected them.

Fifty years ago, only poor and weak countries were under the thumb of foreign interests, and most of those countries were dictatorships where it didn’t matter what the people thought. Now, all countries, except perhaps the U.S., are vulnerable to external pressures. Since the U.S. is the source and strongest advocate of neoliberalism, its government has voluntarily subordinated itself to the demands of finance and agreed to trade treaties that undermine workers’ leverage.

This crisis of democracy feeds upon itself. As governments fail to deliver benefits for their voters and seem unable to protect their citizens from international economic forces, citizens lose confidence in their leaders and doubt that their votes and participation in public debates matter. This opens the way for extremist parties and for elections that turn on phony issues: the religiosity of the candidates, exaggerated fears of dangerous immigrants, anger at the efforts of women and minority groups to achieve equal rights. Donald Trump is a prime example of this turn to authoritarianism, but so are numerous figures throughout Europe. Latin America, up to now, has surprisingly been spared too many such electoral authoritarians.

What does the future hold? Unfortunately, when governments lose legitimacy and citizens lose interest in politics it is hard to rebuild parties capable of advocating and realizing substantive social programs. So far, mass movements opposed to neoliberalism have been episodic and, reflecting cynicism about electoral politics, play little role in endorsing or selecting candidates that they then work to elect to office.

Global warming and other environmental disasters will heighten the threat to democracy, but they also open the possibility of renewed engagement in politics. Global warming already is causing flooding of coastal cities and desertification, creating migration on a scale never seen in human history. Where governments fail to respond to these needs, citizens will become even more cynical and turn to racist anti-immigrant parties.

However, crises in the past, above all wars and depressions, have in crucial instances led to popular mobilizations that invigorate parties with clear programs able to deliver social benefits. Global warming is likely to yield both outcomes: governmental collapse with racial and ethnic conflict in some places, and newly strong and socially engaged governments elsewhere. Countries’ fates will be determined partly by the existing capacities of their governments and their place in the world economy and partly by citizens’ capacity to organize themselves and make coherent demands. There remains space for citizens to shape their future.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.

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