The Political Consequences of the Financial and Economic Crisis in Europe: Electoral Punishment and Popular Protest

Abstract

From the literature on social movements, we have learnt that political mobilization depends on the combination of three sets of factors: grievances, organization, and opportunity. Grievances constitute the starting point: an exogenous shock like the Great Recession creates a tremendous amount of popular discontent. People with grievances seek to express them, and they do so by raising their voice or by exiting. They raise their voice to the extent that they are organized and have an opportunity to do so – in the electoral arena as well as in the direc-democratic or in the protest arena. In democratic societies, citizens have the right to vote and they have the opportunity to express their grievances as voters. As Piven and Cloward (1977: 15) have already noted a long time ago, ‘ordinarily, defiance is first expressed in the voting booth simply because, whether defiant or not, people have been socialized within a political culture that defines voting as the mechanism through which political change can and should properly occur’. Accordingly, one of the first signs of popular discontent are sharp shifts in the voting patterns. The vast literature on economic voting provides us with more precise ideas about how the crisis may have played out in electoral terms. This literature is based on the assumption of instrumentally rational voters, who will reward the incumbents with their vote, when the economy is good, and punish them when the economy is bad. Much of this literature conceives of economic voting as any change in the support for the chief executive, but some also focuses on changes in support for the government coalition as a whole. According to this literature, it is not the personal financial situation, which is decisive for the economic vote, but the perception of the national economy (Duch and Stevenson 2008, Lewis-Beck and Stegmaier 2007). Empirical studies on economic voting make it clear that economic voting is both pervasive and variable, depending on the context. According to Duch and Stevenson's (2008: 65) overall estimates, economic voting is at least as important as issue voting or ideological voting (indicated by left-right placement, or post-materialism). Their results are obtained by analyzing a large number of ‘normal’ elections. Based on Singer (2011), who showed, among other things, that the economy is more likely to dominate other issue concerns under conditions of economic recession, we would expect a much greater average impact of economic voting in elections which take place after an economic disaster like the one we are focusing on here. Context conditions such as the clarity of political responsibility (Powell and Whitten 1993) or the constraints imposed on the government's manoeuvering space (Hellwig and Samuels 2007) modify economic voting: the voters' assessment of the government's economic performance has been shown to only play a role, if the institutional context allows the voters to clearly attribute the responsibility for the economic performance to the government. Moreover, voters have been shown to hold governments less accountable for an economic disaster, if they understand that the government could not do much about it. Based on a detailed analysis of the first parliamentary elections in 30 European countries (the 27 EU member countries, plus Iceland, Norway and Switzerland) after the collapse of Lehman brothers (September 15, 2008), we can conclude that the expectations of the economic voting approach are largely confirmed (Kriesi 2011): in these elections, incumbent parties were severely punished for the negative economic consequences of the crisis, and their punishment was most severe, when the voters could clearly attribute responsibility, as is the case in West European majoritarian democracies. The aspect of the crisis that triggered the punishment apparently varied between West European and Central and East European countries, with unemployment rates being more critical in Western Europe, and growth rates more critical in Central and Eastern Europe. In addition, with the exception of Poland and Slovakia, the budgetary balance seems to have played a crucial role in the extent to which parties of the chief executive in particular have been punished by the voters: the greater the budgetary deficit in the year preceding the elections, the greater the punishment of the government across Europe. The economic voting literature has largely failed to account for the kind of parties that voters turn to when punishing the governing parties. But nothing precludes a closer analysis of the type of parties that benefit from the punshment of the government. Depending on the party system at hand, disaffected voters may have several options: in the first place, they may turn to established opposition parties who habitually blame the government for the country's economic misfortune. In other words, they may turn to the centre-left, if the government was on the centre-right, or vice versa. Contrary to the analysis reported by Lindvall (2012), I could not find a systematic pattern of swings to the left or to the right. Whoever governed was punished – whether the government was on the centre-left or on the centre-right. Secondly, voters may nurture resentment against all the mainstream parties, i.e. against the established political elites, or the ‘political class’ in general, and, accordingly, they may turn to new populist challengers in the party system, provided such challengers are available. In Western Europe, the most important recent challengers of the mainstream parties have been parties of the new populist right. The rise of these challengers is not directly linked to the crisis, but, in my analysis, they turn out to be the only type of party that systematically benefited from the crisis in the first post-crisis elections. In the less institutionalized and much more volatile party systems of Central and Eastern Europe, new parties enter into the electoral competition at almost every new election. In these countries, populist mobilization is a sort of generalized strategy of the opposition, and it is these new parties that largely benefited from the crisis in the first post-crisis elections. Finally, disaffected voters may also turn against political parties altogether. Thus, a more radical ‘exit’ hypothesis expects discontented voters to turn against all existing parties by supporting independents or ‘anti-parties’ (i.e. parties opposing all the established parties and/or making fun of them), or by abstaining. As a matter of fact, such anti-parties have made their appearance in the post-crisis elections in several countries, especially at the local level. Examples include the ‘Best party’ of the comic Jon Gnarr in Iceland, Beppe Grillo's party in Italy, or the folkloristic candidate in the Portuguese presidential elections in January 2011, Manjuel Coelho, who campaigned in a hearse and who made a remarkable 4.5 percent of the overall vote, and no less than 39 percent in his home island, Madeira. The electoral arena observes its own rhythm, and electoral punishment of the governments in the countries hit by the financial crisis and its economic consequences may be impossible in the short run – at least not at the national level, which is the one where the important economic policy decisions are made. Alternatively, electoral punishment of the national government may be meted out in elections at other levels – local, regional or European, which may be on the political agenda in the short run. As case studies indicate, these ‘secondary elections’ have served as referendums on national politics and their outcome put pressure on the national government to accommodate the voters. A typical example is provided by the Irish local elections in June 2009 which were turned into a referendum on the performance of the national government. In these elections, Fianna Fail suffered its worst ever local election performance (down by 7.8 percent to 25.4 percent), a result which foreshadowed the party's collapse in the first post-crisis national elections in spring 2011. Even if there are no opportunities for direct electoral punishment, the electoral cycle is embedded in the ongoing process of political mobilization that interacts with the electoral process in complex ways. Thus, a set of four brief country studies (including four of the countries most heavily hit by the crisis – two West European countries (Iceland and Ireland), and two Central and East European countries (Hungary and Latvia)) confirm that conventional electoral politics closely interacts with popular contention outside of the electoral channel (see Kriesi 2011). First of all, there are other institutionalized channels for mobilizing protest against government decisions. Thus, direct-democratic institutions are available for the articulation of protest in an increasing number of countries. Where available, such institutions are regularly used to voice opposition against the government. In three of the countries most heavily hit by the crisis, referendums were organized which imposed constraints on the government's policies (in Iceland and Hungary) or on the political process (requiring early elections in Latvia). Other institutional channels for protest include appeals to allies in the institutional structure (such as the President, who provided support for the opponents of the government in both Iceland and Latvia), or to the constitutional court (which intervened in issues related to the crisis in Iceland). In the absence of immediately available options in the institutionalized arenas, or in addition to such options, discontented groups of citizens are likely to resort to the protest arena, and try to force political concessions from political elites by directly appealing to the general public. This is Schattschneider's (1960) idea of the ‘expansion of conflict’. Public protest is designed to unleash a public debate, to draw the attention of the public to the grievances of the actors in question, to create controversy where there was none, and to obtain the support of the public for the actors' concerns. Discontented citizens are all the more ready to resort to protest, since protest mobilization has become increasingly conventional, at least in Western Europe, although not yet to the same extent in Central and Eastern Europe. West European countries have become ‘movement societies’, in the apt term coined by Meyer and Tarrow (1998). As this term suggests, political protest has become an integral part of these countries' political way of life: protest behavior is no longer used as a last resort only, but employed with greater frequency, by more diverse constituencies, to represent a wider range of claims than ever before. If grievances are pressing and a response to more or less conventional protest is not forthcoming, however, challengers, even in democracies, may be tempted to step up their protest, to radicalize, and to create a political crisis through massive use of disruption. In all four countries I have studied, protest mobilization was triggered by the government's adoption of austerity measures. These measures provide the link between the budgetary deficits on the one hand, and protest mobilization and electoral punishment, on the other. In all four countries, austerity measures were imposed by the deal they were forced to make with the IMF (jointly with EU/IMF in the case of Ireland). In Ireland and Hungary, the governments had already taken such measures before turning to international loans. In each instance, whether the measures were imposed by the international institutions, or unilaterally by the national government, their announcement immediately provoked protests in the streets. The importance of austerity measures for triggering such protests is also confirmed by the cases of Greece and Portugal, which had to resort to rescue packages imposed by the Troika, too. There is, however, an important difference between the two West European and the two Central and East European cases: while the financial and economic crisis constituted the trigger of popular protest in the West European countries, this protest was already in full swing when the crisis intervened in the two Central and East European countries – due to corruption scandals and the malfunctioning of the party systems. In the latter two countries, the economic crisis served to amplify an already ongoing political crisis, whereas in the two West European countries, it created such a crisis from scratch. Protest mobilization, in turn, has had important repercussions for the electoral channel in all four countries. Under the pressure of the protest mobilizations, the cabinet was reshuffled: in Iceland and in Ireland, the withdrawal of the support by the minority partners under external pressure triggered early elections. In Hungary, the withdrawal of the minority partner led to a weak minority government. In Latvia, the reshuffling was more complicated, but eventually also led to the withdrawal of the former Prime Minister's party and to a minority government. Together, the experience of the governments in these four countries indicate, that, faced with the popular reactions to an economic crisis of extraordinary proportions, government coalitions become highly unstable and suffer from the lack of loyalty of the minority partners. The impact of the protest mobilization on the governments' policies, however, turned out to be severely limited by the constraints imposed on the governments by the international pressure. As the governments in the countries most hardly hit by the crisis discovered one after the other (the Hungarians later than the others), their manoeuvering space did not permit them to make substantial concessions to their citizens' vocal protest. Only in tiny Iceland were the citizens able to force the government to resist outside pressure to some extent. With the support of their country's President, and thanks to an institutional mechanism (the referendum) allowing the population to veto the government's decisions, popular protest has been able to prevent the government from giving in to the international pressure and to expiate the banks' sins with taxpayers' money. Thanks to its citizens' protest, Iceland has been able to avoid the fate of Ireland and Latvia. In the case of Iceland, all types of channels have been involved in the showdown between the government and the citizens: electoral choices, referendum votes, Constitutional assemblies, and protest in the streets have mutually reinforced each other and led to an unexpected outcome. Even in Iceland, however, the citizens' impact was so limited that the voters massively took the exit option in the secondary, local elections after the post-crisis national vote. In both Iceland and Hungary, the exit-hypothesis found some support, too, as the governments voted into office in the first post-crisis elections turned out to be unable to deal with the constraints imposed by the international organizations and the ‘market’. Overall, the political fallout of the Great Recession has remained rather limited so far. But one might argue that we have seen only the first post-crisis elections in most of the countries. The truly critical elections for the exit-hypothesis might only be those following up on the first post-crisis elections, when the voters have come to realize that the parties replacing the punished government were not able to do any better than their predecessors. Once the voters notice that the new government which has replaced the punished parties is forced to take just the same measures as its predecessors whom they had voted out of office, they may resort to punishing the mainstream parties as a whole in the next national elections – by turning to new populist challengers. We have just seen such a development in the case of Greece, where the left populist Syriza made 16.8 percent of the vote in the parliamentary elections of May 2012, and no less than 26.9 percent in the June elections six weeks later, becoming the second largest party behind the winning conservatives who obtained 18.9 and 29.7 percent respectively. It is hard to predict what will happen next. Eventually, protest may subside not because the discontented population starts to trust the government, but because it has lost faith in the effectiveness of protest and/or because it is forced to acknowledge the constraints imposed on the governments by the international political community. Given the constraints of the situation, resigned acceptance of the inevitable may replace contention (as it did in the case of Ireland). Alternatively, protest may escalate, radicalization may produce a political crisis of extraordinary proportions (as it did in Greece), which may lead to electoral realignments and policy innovations that profoundly change European economic and social policies.