Democracy versus Democracy?: Elections after Neoliberalism - American Affairs Journal (2024)

In the United States as well as abroad, this is an election year—what has been called a “global election supercycle.” By the end of 2024, countries holding almost half the world’s population will have gone to the polls to vote in major elections: general elections, presidential elec­tions, and elections for the European Parliament. The total number of people voting during this calendar year is likely to surpass any previous in history given an unplanned synchronicity in scheduled elections and the triggering of several unscheduled national elections over the sum­mer. At the time of writing in mid-October, fifty-seven such elections have already been held, with another sixteen scheduled to come. Al­ready, over one and a half billion ballots have been cast, reflecting a turnout of over 61 percent of registered voters.1

Such large numbers of voters around the world might suggest that elections have become routine, the product of what political scientists call democracy’s “third wave,” stretching from the collapse of dictatorships in Europe and Latin America in the mid-1970s to the fall of the Communist bloc at the end of the Cold War.2 Yet in many of the countries voting this year, including the United States, what is claimed to be on the ballot is nothing less than the future of democracy itself. The leaders of major parties, both here and abroad, accuse one another of fundamental betrayals and basic corruptions, of being unwilling or unable to maintain the processes, traditions, or forms of compromise necessary to make democracy work.

Democracy is allegedly at stake not only when an outsider or “disruptive” candidate, party, or alliance of parties challenges a national establishment, but often also in the justification for such challenges. From across the political spectrum, rebels advance in the name of a democracy lost, betrayed, or stolen even while they are accused of rebelling against democracy itself. Perhaps the only consolation in this tumult is that “democracy” remains a point of rhetorical unity, and something like the will of the voters is still seen as the final touchstone of political legitimacy. If hypocrisy is the tribute that vice pays to virtue, then our clashing politicians remain—so far, at least—dependable hypo­crites.

Nevertheless, the elevated political stakes of the current moment suggest a broader shift, registered earlier and more forcefully in some countries than others, but by now widespread and durable. The striking fact is that very few countries—including the United States—are enjoying a normal election this year. What is “normal” will of course vary somewhat country by country. But as a rough barometer, a normal election might consist in a competitive contest between two or three (sometimes more) established national political parties, led by seasoned and publicly recognized leaders, staking out policy positions within a broad political mainstream, and expecting to participate in a relatively peaceful and transparent campaign followed by an orderly transfer of power.3

Admittedly, on this definition, some countries have enjoyed few if any normal elections in recent decades—a telling fact I will discuss further below. Nevertheless, an ideal of the normal election was established in the postwar experience of leading democracies, and partly institutionalized in many countries through laws regulating political parties, public speech, and voting rights. A normal election remains the benchmark of political legitimacy and is presumed in many empirical studies of democracy and democratic backsliding.4 So why have there been so few “normal” elections during this year when more people than ever are going to the polls?

Social media has of course been fingered as a major problem. While I do not want to deny its role, to blame social media alone for the abnormalities of the 2024 election year risks missing deeper dynamics beneath the rage and alienation it so efficiently channels and amplifies. It may have been a contributing factor to the rise of so-called populist movements in a variety of countries over the last decade. But since all sides use it, the overall effect seems to have been a generalized polarization and increasing anti-incumbency sentiment, on left and right, rather than specific electoral victories for one party or another. Something more seems to be at stake in and across such elections—something that social media may capture and channel, but which is not merely the fantasy or hallucination of online crowds.

Rather, this election year reveals conflicts along distinct and cogniza­ble fault lines, suggesting an emerging and shared global predicament across countries at all levels of development, and perhaps especially liberal democracies. This predicament is something that I examined in its international dimensions in an earlier essay in the pages of this journal diagnosing what I called the “world-historical gamble” of neoliberalism.5 The market-forward geoeconomic strategy of the last few dec­ades—pushed as a foreign policy agenda by the United States and its allies after the end of the Cold War—backfired in a dramatic and alas all too predictable fashion.6 The result, I argued, was an undermining of both international peace and the global standing of liberal democracy.

In the present discussion, I want to turn from the collapse of the world-historical gamble of neoliberal globalization to what may be understood as its domestic face: the disappearance of the “normal” election, with 2024 as a bellwether. Following the end of almost two generations of complacency about neoliberalism and its varied consequences, we now see political dysfunction emerging in its wake. The problems come from three interrelated structural trends, which no party anywhere, and no alliance or possible “realignment” of parties so far, seems able to navigate successfully: first, the failure of market-led globalization to generate shared and socially inclusive growth in either developed or developing countries; second, the “global China shock” to wealthy, middle-income, and even poor countries following its integra­tion into the world commercial order, the capstone of market-led glo­balization; and finally, the decline of U.S. power, and with it, American leadership in provisioning global public goods, including geopolitical stability. It is only beginning to be recognized how these trends are altering the political calculus in countries large and small, rich and poor, and with no obvious national, regional, or even hemispheric solution to the ways they undermine domestic political stability and associated social compacts.

At the heart of the present predicament is an unraveling of the two primary forms of political legitimation familiar in the postwar world, one formal, the other de facto. Political scientists distinguish “input” and “output” legitimacy: the first looks to the processes by which policies are made and takes something like “the consent of the governed” as the basis of legitimacy; the second looks to whether policies, however produced, generate desirable outcomes, usually wealth and security, which it is presumed the governed want.7

In the postwar world, more people than ever were voting—a trend that continues into this record-breaking year—and for several decades after the Second World War, more people than ever were enjoying an improving standard of living. So long as the postwar boom lasted, there was a significant overlap between those two groups of people: citizens of liberal democracies, whether developing or developed, found wealth and relative security in an American-led bloc and then, more briefly, an American-led unipolar world. This generated a virtuous circle between processes and outcomes in countries that valued “input” legitimacy of varying kinds.

But as postwar “embedded” liberalism turned to neoliberalism—a slow and complex process beginning in the 1970s and reaching its apogee with the end of the Cold War—it began to undermine the domestic social compacts that had allowed these countries to pursue both popular self-government and integration into the global market.8 So long as global integration “worked”—that is, ensured continued growth and a broad distribution of its benefits—it could serve as a decent substitute for economic planning, and something like a development program, allowing liberal democracies to moderate distributional conflict and contain its attendant political ills.9 But as input and output legitimacy have come apart, almost no country’s government can seem to “get it right.” Political parties make promises they cannot keep, or promises that fail to achieve results, and electoral campaigns appear both pointless and urgent—and the legitimation of the entire system of liberal democracy comes to seem palpably at risk, in both its domestic and its international dimensions.

It is worth noting the alternative form of legitimation now waiting in the wings, perfected in the largest export economy the world has ever seen—a technocratic authoritarianism focused on making sure the factories keep running. Since 2019, Xi Jinping has been calling China a “whole-process people’s democracy,” an allegedly superior form of democracy to the model of “one person, one vote” promoted by the West. The concept was further detailed in a 2021 white paper by the Chinese State Council entitled, China: Democracy That Works—a clever double entendre at a time of high unemployment across the world as the Covid-19 pandemic shut down entire economies.10 Xi’s ruinously strict anti-Covid policy may have taken the shine off that model, at least temporarily, but a focus on outcomes as opposed to the processes of policymaking will surely remain a constant temptation when nothing seems to “work” in democratic politics.

As usual, in 2024, it will be easier to cast a vote than to secure the future. It is nevertheless worth observing that in none of the countries voting this year do we see political parties calling for the abolition of democracy in favor of the restoration of deposed monarchies, or the institution of emergency military councils, or developmentalist or Com­munist dictatorships. Expressly antidemocratic agendas on the right and left were familiar in many countries earlier in the twentieth century. Today, democracy is nowhere on the ballot in that sense, despite varied and dramatic forms of democratic “backsliding,” to use the polite ex­pression. Democracy’s skeptics—even its enemies—still wish to claim its imprimatur. But if democracy does not deliver—if it cannot deliver—then all bets are off concerning the next “global election supercycle.”

The World Goes to the Polls

It is perhaps easier to name the countries that aren’t voting in 2024 than to name all those that are. We must of course distinguish voting in a competitive or at least “semi-competitive” election from voting in a rigged one and from not voting at all.

To start with those not voting, China does not hold elections at the national level. Its “whole-process people’s democracy” does support local elections in villages and towns, often consultative, while maintaining elite party government at the top. But almost everywhere else holds national elections, at least sham ones. North Korea was scheduled to have an election again this year after the ruling Worker’s Party of leader Kim Jong Un officially received over 99 percent of the votes in the last election, held in November 2023; it has so far been delayed but no one doubts its eventual outcome.11 With slightly more competition on the ballot, President Vladimir Putin nevertheless managed 88 percent of the total vote in Russia’s mid-March election.12 According to the Kremlin, the result showed strong support for Putin’s continuing invasion of Ukraine; the electoral victory allows him to rule until 2030. Reports of forced voting and ballot-box stuffing went unexamined in what the European Parliament called a “farcical performance.”13

Iran had a significant election with two rounds, in March and May of this year. Record-low voter turnout marked the first stage—only 40 percent of eligible voters cast a ballot—which advanced two candidates to the second round, in which the reform-minded Masoud Pezeshkian eventually secured a majority in a runoff against hardliner candidate Saeed Jilali. The International Crisis Group called it an “exclusionary” election, noting “the population’s growing dissatisfaction” and warning that the “effort to deepen conservative political dominance under­score[s] a widening divide between state and society.”14 The election of course took place in the midst of a widening conflict with Israel, opening up toward outright war, and in the wake of massive civil society protests a few years earlier that were repressed severely by the regime.

By contrast with these cases, Taiwan held a competitive contest to open the election year on January 13, 2024. Democratic Progressive Party (DPP) candidate William Lai, formerly the country’s vice presi­dent, won a plurality of the vote, split three ways, and delivering the country’s legislature into coalition government.15 The election was widely seen as a rebuff to Xi Jinping’s ongoing pressure campaign, and came in the midst of intensifying competition between China and the United States.

The geopolitical and geoeconomic rivalry between the United States and China was also present, though less squarely, during Indonesia’s election of February 14, 2024. The third-largest democracy in the world after India and the United States, the election saw almost 60 percent of the vote going to the former defense minister Prabowo Subianto. With over 200 million registered voters, and a turnout of over 80 percent, the Indonesian election suggests broad continuity in the selection of Subian­to, endorsed by the outgoing (term-limited) President Joko Widodo (“Jokowi”). As the Carnegie Endowment reports, “Since 2014, Jokowi has led Indonesia through a period of rapid economic growth” hinging on infrastructure development, based on “state-owned enterprises taking funds from Chinese companies to build new highways, airports, power plants, and a high-speed rail line linking Bandung to Jakarta.”16 Subianto is expected to continue Jokowi’s effort to “balance” its major trading partner (China) and its historical geopolitical ally (the United States) in their strategic competition, including over Indonesia’s mineral and energy resources.17 At the same time, the government is considering a massive expansion of tariffs against Chinese imports of electronics, textiles, and machinery—signaling the difficulty it has had in generating growth beyond Chinese-funded infrastructure development or exploita­tion of mineral and raw material resources.18

Elections were also held across most of South Asia, which faces similar problems concerning growth and development. In India, national elections took place over two months in May and June 2024, and humbled Narendra Modi’s BJP, which lost voters even in its traditional heartlands against a backdrop of economic underperformance and wide­spread disguised unemployment and underemployment. India’s elec­tions were widely claimed to be a victory for Indian democracy—if not entirely for the opposition Congress Party—given the resilience of its institutions and the restoration of a more competitive electoral field after the BJP’s losses (and Modi’s acceptance of the losses).19 By contrast, elections in neighboring Pakistan, postponed in 2023, finally took place in February 2024. They followed two years of political unrest and an ongoing constitutional crisis after the impeachment of former prime minister Imran Khan on corruption charges. A month earlier, Bangladesh held national elections with record low voter turnout, sparking widening protests and the eventual emergence of a caretaker government to replace Sheik Hasina’s increasingly autocratic Awami League. And at the end of September, Sri Lanka—troubled for the past few years and now in an IMF restructuring program to address its debt and macroeconomic crisis—saw the victory of outsider candidate Anura Kumara Dis­sanayake after a two-round election. Dissanayake ran on an antipoverty and anti-corruption platform and has been critical of the IMF’s restruc­turing.

Outside Asia, Mexico was the most populous developing country to hold national elections. It was one of the only significant elections this year in Latin America, other than Venezuela’s, which saw the fraught reelection of Nicolás Maduro, and Uruguay’s, scheduled for the end of October. On the African continent, South Africa (population sixty mil­lion), Mozambique (thirty-five million), Madagascar (thirty-one mil­lion), and a host of smaller countries (Tunisia, Chad, Rwanda, Senegal, Botswana, Ghana, Guinea-Bissau) went to the polls. The most significant of these, South Africa’s, saw the ruling African National Congress humbled, losing its parliamentary majority for the first time since 1994. Elsewhere on the African continent, it must be noted, there have been nine transfers of power in coups since 2020, and as many unsuccessful attempts, centered in the francophone region now referred to as the “coup belt.”20 Many began in contested or delayed national elections and are being discussed as reflecting the “failure of African democracy.” Afrobarometer, a pan-African survey organization, has noted a fall in support for democracy across the continent—and, perhaps most worry­ingly, in some of its longest established democracies, including South Africa and Botswana.21

Summarizing for the developing world, India, Indonesia, Pakistan, Bangladesh, and Mexico—countries with populations over 100 million—all held elections this year, varying in how “free and fair” they were. Among large developing democracies, only Brazil and Nigeria were notably missing. (Both saw major elections, in 2022 and 2023, with major splits in their electorates: in Brazil, a close-fought campaign between two former presidents, Lula and Bolsonaro, leading to Lula’s narrow victory, and in Nigeria, a contest among the leaders of several regional parties.) A wide swathe of other countries, including mid-sized and smaller democracies, also joined them at the polls.

The year 2024 should have been a great occasion to celebrate—a generation after the new millennium—the consolidation of democracy across the developing world. No such celebration now seems warranted. Anxiety about the future of democracy tends to focus on dramatic shifts in Europe and the United States, for obvious reasons. But the future of democracy at the global level is being hammered out in New Delhi, Brasília, Lagos, Jakarta, and Mexico City as much as in Washington, London, or Berlin—and its prospects across the so-called Global South seem decidedly mixed. Democratic “backsliding,” according to one or another definition, is now widespread almost everywhere, with the possible exception of India, which tends to be exceptional. The oldest postcolonial democracy and the world’s largest has long been an outlier in international comparisons; it is nevertheless worth noting that, after a decade of anxiety about the consolidation of the BJP, India enjoyed a normal election in 2024.

In the middle of the twentieth century, it was commonplace, if perhaps condescending, to expect postcolonial countries to look to the “West,” and above all to the United States, in modeling their popular governments. But political dysfunction across the developed world has left few obvious leaders to follow there—no established core of liberal democracies for an emerging periphery to emulate. Focusing on Europe, unscheduled national elections were called over the summer of 2024 in France and in the UK, while major scheduled elections were held for the European Parliament and in Austria, Belgium, the Czech Republic, Finland, Portugal and elsewhere, in addition to many regional or state elections, which were especially important this year in Germany. While it remains the case that “all politics is local,” the localized version familiar at the level of the EU Parliament, as well as in many of its larger countries, reflects the confluence of the last decade’s pressures. The ongoing refugee crises and mass migration, the war in Ukraine, infla­tionary pressures from supply-chain shocks and energy crises have boosted the prospects of parties outside the center-right and center-left coalitions that dominated postwar European politics. In some elections, such as France’s, the confrontation is by now familiar, reflecting a deeply divided country and Macron’s difficulty pushing through an un­popular agenda of economic reforms. In snap legislative elections called over the summer, his party, in a last-minute alliance with other centrist and leftist parties, once again fended off the “National Rally” (the redubbed Front National) of Marine Le Pen and her allies. It is notable that this “republican front,” which serves to keep the Far Right out of power, has been anchored in recent years by a disruptive party still less than a decade old—Macron’s Renaissance, formerly, En Marche—in alliance with a populist Left. The constellation of established parties that had governed France’s postwar decades are now cast in a supporting role.22

In other European countries, political disarray is relatively new. In Germany, emerging “disruptive” parties including the right-wing Alter­native für Deutschland (AfD) and the left-populist Sahra Wagenknecht Alliance (BSW) have upended the politics of the country, whose center-left “traffic light” coalition government is struggling to articulate a program after a decade and a half of Angela Merkel’s leadership.23 In a similar pattern in late September, Austria saw the narrow victory of the far-right Freedom Party, which had promised the voters a “Fortress Aus­tria,” though it now faces the difficult task of forming a coalition government.24 A familiar pattern in these and other European elections has seen so-called populist parties draw votes, often those of the work­ing class, away from both center-left parties—which made their com­promises with an ordoliberal European Union to the detriment of their traditional voter bases—as well as from center-right ones, which were too slow to tack away from the established repertoire and rhetoric on immigration, globalization, and more. It is notable that this is not, contrary to some perceptions, strictly a generational divide. In many countries, the young—Europe’s future voters—are accelerating the rightward tilt.25 And in telling analogy to the “Rust Belt” politics of the United States, populist parties are often competitive in deindustrialized regions where the Left, socialist or communist, once dominated.

The Middle-Income Trap

Across all these particular instances of political dysfunction, is there any more general pattern to discern about democracy and its prospects? Abstracting from national contexts is always perilous in analyzing elections, which are often driven by a clash of personalities as much as by policy differences among the parties. But it is notable how many of the countries considered above are in political crisis or were recently—as in Sri Lanka, Bangladesh, and elsewhere. Others face stalemates among several parties, none of them operating effectively across regions or identity blocs—as, for example, in Nigeria. In others, a dominant party has been punished for failing to deliver on employment and growth, as in India and South Africa. And a great many of them feature “outsider” or emergent political parties, sometimes channeling popular discontent for an election cycle or two before dissipating. Notably, these patterns appear in rich countries and in poor ones, with no strong distinction between a stable democratic core and an up-and-coming periphery.

To focus on the developing world, it is striking how few election campaigns this year featured fundamental disputes over the state and its role in development. Sri Lanka, now overseen by the IMF, is perhaps the exception that proves the rule. Instead, “anti-corruption” tends to fea­ture as the main message of anti-incumbency politics, aiming to check partisan redistribution on the basis of party, region, or religion. A rotation among parties, including new parties that rise for a cycle or two, is the predictable result—along with a widespread failure to achieve shared and sustained growth for bourgeoning young and upwardly aspirational mass electorates.

Behind this pattern is the evident failure of the postwar developmentalist state, which gave way to the general injunction to globalize—that is, to substitute integration into the world market for a coherent development program.26 Globalization as the proxy for a development program now seems at an end. Few, if any, developing countries—apart from China—have enjoyed the kind of growth that was confidently assumed a generation ago, in the heyday of the Wash­ington Consensus. Instead, almost all of them are in one version or another of what the World Bank has called, in an eponymous 2024 report, “the middle-income trap.”27 The Bank claims that over one hundred countries now fall into this broad “middle” income band, with gross national income per capita ranging from $1,136 to $13,845. And almost all of them are struggling to achieve the high and sustained growth that would allow them to escape to “high-income” status.

As with “middle-class” standing on the U.S. social scale, there is of course a big difference between a “lower-middle income” country such as the Philippines or Bolivia in comparison with an “upper‑middle in­come” country like Argentina, Turkey, or—most sig­nificantly—China. Moreover, questions about income distribution and the conversion of national currencies, via “pur­chasing power parity” indices to a U.S. dollar metric, make anything other than relatively crude comparisons here formally meaningless.28 But even admitting these problems, we can still follow the Bank’s broad assessment of a “middle-income trap” affecting most countries in the world, and observe the rarity of a South Korea, which moved from primary agricultural production to advanced manufacturing over a few short decades.

As the Bank defines it, the “middle-income trap” now affects coun­tries holding 75 percent of global population as well as two-thirds of those living in extreme poverty, according to the bank’s own (alas, significantly flawed) money-metric assessment of poverty. The Bank conjectures that the trap stems from “policies predicated on superficial measures of economic efficiency,” which make them “especially prone to premature slowdowns in development.”29 This is the “premature deindustrialization” observed in Brazil and elsewhere in the developing world over the last generation and which has been tied to the “global China shock”—the sudden entry into world markets of Chinese ex­ports, at scale, following the country’s admission to the WTO in 2001.30

As a solution to the middle-income trap, the Bank proposes what it calls the “three ‘I’s”— “investment, infusion, and innovation”—and in this nice alliteration, you can almost hear the opening of a thousand laptops by consultants and junior ministers ready to capture it in their PowerPoint slides. Investment (FDI) is followed by “infusion”—basi­cally, the import of better technology from elsewhere—which supposedly kickstarts “innovation,” and with it a movement up the value chain of global production to “high-income” status. Nowhere does the report explore whether the rise of one “upper-middle-income” country—China, now the world’s largest exporter for many years in a row—could be stifling the upward movement of all the rest.

Indeed, China figures awkwardly in the World Bank report, as it must in any study that tries to assess the largest export economy and arguably largest economy overall as an exemplar of a type (“middle-income”) rather than sui generis (as China). It is grouped with “high-income” countries when the report discusses investment levels, clean-tech value chains, and so on. But it is grouped with the “BRIC countries” when the report wants to criticize “state-owned enterprises,” which it claims are disproportionately responsible for coal and fossil-fuel exploitation, while apparently the “private sector” leads in renewables (a fact one hesitates to point out to the Chinese state agencies using massive subsidization to power its clean-tech exports). At still other times, China features abstractly as both a model of development and as a warning to other developing countries to get up to speed. As the report’s foreword has it:

[M]any middle-income countries still use a playbook from the last century, relying mainly on policies designed to expand investment. That is like driving a car just in first gear and trying to make it go faster. If they stick with the old playbook, most developing countries will lose the race to create reasonably prosperous socie­ties by the middle of this century. At current trends, it will take China more than 10 years just to reach one-quarter of US income per capita, Indonesia nearly 70 years, and India 75 years.

One looks in vain for any indication as to where that “old playbook” came from (hint: the Bank, inter alia) and why it is now discredited, other than that the “superficial policies” of the last century, adopted in the eager search for foreign investment, are now failing to produce growth. But why not? There are discussions of several “shocks” and how they can affect growth trajectories—the oil shocks of earlier decades, other fuel shocks, and related “temporary” and “external” shocks—but no discussion of the China shock as a global and not merely a developed-world problem, and moreover, as chronic and not merely a shock.31

But why is it now so hard to “expand investment” in poorer coun­tries, in precisely the way that China did during its opening to the world market? And, if development is indeed a “race” that some countries look likely to lose, why should we think it can be won generally? (Does everyone cross the finish line together in an ideal scenario?) And what will happen if not—both to developing countries and to the world-system as a whole? If China “wins” in ten years what ends up taking Indonesia or India seventy-five years to achieve, what happens then? What is the political character of that far-off world, as glimpsed now through these simple extrapolations of current growth curves?

The report’s lead author, the chief economist of the World Bank, is at least honest enough to confess up front what its authors believe about escaping from the middle-income trap: “We are not naive enough to think this will be easy.” To achieve high-income status while also decarbonizing, he explains, “Middle-income countries will have to work miracles.”32 So, to summarize, in a report published this year, the World Bank has suggested “working miracles” as the way out of the “middle-income trap” affecting, by its own reckoning, 75 percent of the world’s population.33 Voters, take note!

From Integration to Stagnation

What’s really going on, and why should successfully following the World Bank’s “three ‘I’s” amount to a “miracle”? Further research should probe the “global China shock” and the broader failure of neoliberalism as a substitute for a development plan. Following its accession to the WTO in 2001, China gradually became the anchor for the low end of global manufacturing—competing with other countries at a similar level of development but at a scale, driven by its population size and its state-capitalist economic policies, that was unprecedented in world commerce. It then ascended rapidly to its present position, which allows it to challenge or outcompete its former trading partners, like Germany and the United States, in almost all sectors, including the most advanced manufacturing sectors. This is an impressive rise, whatever else one may wish to say about it, and its impact on the developed world has been the subject of increasing research.34

But what about its effects on its erstwhile rivals that the World Bank now calls “middle-income” countries? One hopes these questions may one day attract the attention of the Bank’s many experts.35 In the mean­time, the surge of Chinese exports following a partial pullback during the Covid-19 pandemic has already been dubbed the “China shock 2.0” and spurred a new wave of protectionism in emerging and developed economies alike.36

Why are all these “middle-income” countries competing in the same economic space “trapped”—meaning, unable to make a turn to grow both their domestic production and consumption? In contrast to the developmentalist politics of the immediate postwar era—and, it must be said, the East Asian “Tigers,” including China—these countries have mostly followed the advice of the Bank and other international expert institutions in surrendering active government and “market-crafting,” instead accepting a role in the existing global division of labor. But if integration into the world economy does not prove an adequate substitute for a development program, then stagnation within it seems inevitable—and stagnate these countries have (hence, the “trap”). And following domestic stagnation in the developing world comes, all too predictably, mass migration to where the jobs are—and the political convulsions in Europe and the United States that mass migration has brought.

What the World Bank may be interpreted as saying is that, unless things change significantly—and in ways that suggest the exception (a “miracle”)—output legitimacy will be hard to achieve across the devel­oping world for the foreseeable future. It is simply not clear what “works” for development anymore. Countries that have cheap labor to sell—or, more worryingly, minerals, fossil fuels, or biomass from some of the last untapped ecosystems on the planet—are unlikely to be able to provide stable and growing incomes for their young populations if those incomes depend on making labor-intensive things at home to sell abroad. It’s a business model that everyone—including China—is already in. Indeed, the current gluts on world markets, as seen in macroeconomic imbalances and more, suggest that the better analogy for development in the World Bank report would have been not a race, which has fixed parameters (such that any country can eventually reach a hypothetical finish line) but a zero-sum contest, as in a football game or boxing match, given competition in the global marketplace against all the rest. In many countries, global economic integration seems to have served not to stimulate development but as a recipe for deindustrialization and stagnation, especially following the original China shock, and now—increasingly—the so-called China shock 2.0.

More profoundly, given the density of present economic interdependence, any success story in the current world order must be reck­oned a success of the whole system, as I argued earlier in these pages with respect to the dramatic case of Chinese poverty reduction.37 What we call “globalization” can best be understood as an international system in which each country is connected to the rest through interdependent output-based legitimation. But where is this interconnected system of legitimation heading if most countries in the world are “trapped” by it?

What is obviously true for democracies in the middle-income band remains true to some extent for the democracies of the rich world. Apart from the exceptional case of the United States, which I discuss further below, almost no developed country seems able to escape cleanly the end of the neoliberal world order and its political consequences. Elec­tions this year in the United Kingdom, France, Austria, and for the European Parliament—as well as important state elections in Germany—reveal the depth of the problem and have already received wide comment. It has been decades since any of these countries, including the United States, enjoyed broadly shared and sustained growth, which ended in most cases after the “thirty glorious years” of the postwar period. In the United States, real incomes have been stagnant for a generation.38 In Europe, the same (or worse) has been partly offset by transfers organized through its superior social welfare programs, but these of course did not reverse the underlying growth dynamic.

The explosion of “populist” parties, and more generally disruptive or outsider parties on the right and the left testify to the failure of the center-right and center-left parties of postwar European social democracy to propose real answers to this decades-long problem. The disruptive parties may not either, of course, but since most have not been in power, it is easy for them to run against the failed status quo. And in the few places where they have been in power—including Hungary, Poland, and Italy—their electoral strategy requires running against “Brussels” while their governance strategy depends precisely on exploiting it.

More broadly, it turns out that integration into a market-led order on the Continent was not an adequate substitute for an economic plan—that is, a program for inclusive growth and employment. This is true not only for countries in Southern Europe—which suffered the most after the adoption of the euro currency and the internal devaluations it gen­erated after an initial boom—but even for some of the original founders of the European project, France and Italy, and even Germany itself, the primus inter pares of the EU-27. The political fallout from the collapse of the European welfare state model and the insufficiency of what some believed its supranational salvation now manifests in country after country, with no end in sight. But the reaction itself is now globalizing, tying together slow growth, inequality, and cultural contests over immi­gration, identity-based social movements, climate initiatives, gender politics, cross-border cooperation, and more. This reactionary right-populism had once seemed restricted to Europe but has recently taken center-stage in the United States and is even emerging in the politics of some middle-income countries, notably Brazil and Argentina.39

Representative Democracy and Its Rivals

As billions stream into the polls this year to vote, we must ask: what are they voting for? In a simple phrase—they are voting for people and parties. That is, for governments of their representatives—presidents, parliamentarians, mayors, senators, and governors—ideally within the “normal” framework of competitive multiparty contests. Only rarely do the people also vote directly on legislation. Except for elements of direct democracy in unusual places like Switzerland and some of the western states in the United States, they only do so through ad hoc plebiscitary referendums, like Brexit—and even that vote was merely “consultative” and required subsequent parliamentary ratification.

By the same token, most of what happens in the governments of liberal democracies today, let alone in regimes like Russia or Iran, is never in the hands of any mass electorate. This is true not only of all—or almost all—national legislation passed in the people’s name by its repre­sentative bodies. It is true, too, of the decisions of powerful administrative agencies, the composition of judicial courts, including courts of constitutional review, and the actions of central banks. Even changes to the constitution, frameworks of fundamental rights, and major international legal commitments, including whether or not to go to war, follow today what James Madison praised as that “total exclusion of the people, in their collective capacity” from government, which he saw as the chief principle of modern representation.40

Since at least the end of the eighteenth century, this system of government that channels popular will through residual medieval insti­tutions of representation like parliaments has been a far cry from what the ancients called demokratia, or what early modern republicans theo­rized as popular self-government.41 That distance generally came as a relief to those like Madison who were educated enough to recognize it. As Benjamin Constant argued influentially in the aftermath of the French Revolution, the “ancient liberty” of demokratia was unattainable under modern conditions of commercial integration, free labor, and religious pluralism. Efforts to renew it, as in revolutionary France, quickly became despotic, undermining the freedoms of conscience and commerce central to “modern liberty.”42 Instead, some schema of liberal rights to be free from government—rather than the democratic right to constitute the government—was what modern citizens most needed. Tacked on were various assumptions as to why modern governments that were not of the people could nevertheless be for them—that is, reliably taking their private interests into account, if only their fundamental interest in having government do less to them. These accounts often included an argument for some measure of popular participation, which was claimed to make a government better than its rivals: stronger, richer, more agile, more responsive and rational, more beloved, and thus less likely to fall or to suffer defeat in war—what we might think of as the ultimate kind of “output” legitimation.

In the context of warring states—which is to say, in our continuing context—these accounts developed into a stylized opposition between free states that protected fundamental liberties (even if falling short of genuine democratic self-constitution) and those—“tyrannies”—that did not, along with various arguments as to why the former were likely to outcompete, or at least outmaneuver, the latter. This framing first took identifiable shape in British opposition to the “Sun King” Louis XIV’s military expansionism and his persecution of religious minorities at home, many of whom fled to England. It flowered in the fights against the French Revolution, especially in its phase of Napoleonic dictatorship, which swept across the continent in a frenzied but outdated “spirit of conquest”—which Constant contrasted to the allegedly peaceable “spirit of commerce.”43 An alliance of free peoples under British leader­ship then rallied through the two great wars of the early and mid-twentieth century—gradually accepting in the process the mantle of “democracies”—and persevered into the Cold War that followed, with Britain becoming the junior partner in this alliance to the United States.

During a brief but fateful multidecade interlude from roughly the fall of the Berlin Wall to the rise of Xi Jinping’s China, the assumption was that this opposition between free peoples and tyrannies could be peacea­bly overcome through global commercial integration, signaling the “end of history.”44 We will return below to this fateful interlude—it is the setting of our current passage away from a generation of neoliberalism with all its naïve hopes and lucrative gambles—but for now we may simply observe that an existential opposition between “democracy” and “authoritarianism” once again frames our geopolitics. In this election year of 2024, an alliance of democracies is struggling against a motley crew of dictatorial, theocratic, and “Communist” authoritarian regimes in hot wars in Europe and the Middle East, and a cold war in the Pacific, befuddling the chatterers, sycophants, and other “thought leaders” who assured us up to roughly yesterday that a world of free trade would be good for freedom—as well as peaceful, happy, and, anyway, inevitable.

If the great test of Constant’s “ancient liberty” was whether it could be revived under modern conditions, the great test of “modern liberty” is whether it necessarily clears the field of its modern (not ancient) rivals, including those committed strategically to some parts of its program—for example, commercial competition—but not others, such as individual rights or respect for religious pluralism. The main competitor today to “actually existing democracy,” to adapt a phrase, is not the old Jacobin (or, more accurately, Girondin) dream of direct popular democracy, but one or another form of authoritarian dictatorship, whether the personal rule of a Vladimir Putin or Kim Jong Un, the more complex party rule in Xi Jinping’s China, or the theocracy of ayatollahs in Iran.

As to the “actually existing democracies” of today, only the addition of important adjectives—chief among them, “representative,” “consti­tutional,” “parliamentary” or “liberal”—have rendered their schemes of partial popular participation a species of “democracy” in modern par­lance. After antiquity, the word and the concept it described had seemed sullied, but growing working-class enfranchisement in the nineteenth century plus anti-colonial revolutions in the twentieth turned popular government into a new standard of political legitimacy. A revalued and redescribed regime—“representative democracy”—thus made a remark­able journey from oxymoron to pleonasm, and must now be defended against threats on all sides, including perhaps even from within its own system of routinized elections and political representation.

As noted above, in none of the elections in this extraordinary year have we seen major parties calling for the abolition of such actually existing democracy. For now, at least, one party’s threat to democracy tends to look like another’s effort to deepen it. It is true that many countries have seen a slide toward “Caesarism,” that familiar conjunction of increasing authority in the executive justified by mobilization from below.45 These and other instances of a shift from status quo politics are often labeled “populism,” and denounced by centrist politi­cal establishments as a threat to actually existing democracy. But supporters consider these challenges as better reflecting popular will—that is, as deference to democracy, or the realization of a more deeply democratic ideal. Likewise, those calling for a variety of judicial or expert limits on mass politics, including even the suppression of public speech or the prohibition of insurgent political parties, as occurred leading up to and following the contentious state elections in Germany, tend to do so under the same banner of strengthening democracy.46 Seeming threats to democracy such as the increasing authority of an executive, the use of emergency or ad hoc powers by governments, or the delegation of major decisions to unelected judicial or administrative bodies tend to be justified by the same ideal. Erstwhile critics—partisans on the other side—are often only too willing to make peace with the same dispensation of governmental power should their own favorites come into control.

While much of this normative confusion is obviously opportunistic and partisan, some of it reflects a more basic puzzle concerning how governmental representation can best be understood as “democratic” in the absence of almost anything today that resembles the direct democracy of the ancient world. There and then, legislation was a popular matter for assemblies of citizens, while elections were understood as essentially “oligarchic” (i.e., the selection of oligoi, a few). Our situation today is of course very different, mainly in that representation, which was once understood as the main alternative to democracy, must now function as its chief vehicle, apart from rare episodes of actual mass legislation or constitutional ratification.

But what organization of governmental powers or processes best realizes the “democracy” that representation might allow? Is a bold executive elected by large national majorities a democratic champion or a threat to democracy? What about a constitutional court that strikes down popularly supported legislation—or which, under new leadership, regularly reverses its precedents? How about a central bank that uses inflation targets or otherwise maintains its “independence” from “poli­tics”? Or a political party running on the promise to break a balanced budget amendment or “debt brake” to allow increased public spending? Is a candidate who proposes to withdraw from an international trade agreement or to leave a supranational political body a threat to democracy or its champion? What about a politician who promises to default on foreign creditors (or even domestic ones) to reduce the national debt—or one who tolerates the devaluation of a national currency to accomplish the same end? Is it more democratic to deport illegal migrants or to let them stay—and, if they stay, should they vote in the country they now call home? Should voters be allowed to elect their judges—as in a controversial new law in Mexico—or are unelected judges a pillar of democracy (and who should decide that, apart from the judges)? What is the democratic response to the rise of globe-spanning social media platforms—or any other form of concentrated corporate power and private ownership? And most important, what form of democratic sovereignty—popular constitutionalism, regular plebiscitary referenda, and so on—should or could undergird any of these forms of limited government?47

That there are not clear answers to any of these questions today reflects the historical fact that the second and third waves of democracy took place during the postwar period of U.S. hegemony. A distinctively American brand of liberal constitutionalism then claimed the mantle of democracy, gradually replacing the push toward parliamentarism that had marked the earlier British hegemony.48 In these postwar decades, input and output legitimacy went broadly together for thirty “glorious” years from 1945 until the beginning of neoliberalism in the mid-1970s. As long as input and output legitimacy were thus paired, the lack of clarity about which political “inputs” were democratically legitimate or appropriate could be sidestepped. This pairing, moreover, may have been in large part an historical accident that allowed a focus on performance rather than process, reinforced by the unusual ideological config­uration of the Cold War.49 Under these unique conditions, representative democracy could be consolidated as a political ideal with its internal tensions or ambiguities left a matter of high theory, seeming to require no serious correction in political practice.

The segregation of input and output legitimacy after their congruence in the postwar decades followed the central logic of (American-led) neoliberal globalization, which siloed the economic and political dimen­sions of both domestic governance and foreign policy. After a generation of this “world-historical gamble,” output legitimacy has become the justification of the Chinese Communist Party, with China the world’s export powerhouse and the prime beneficiary of economic globalization.50 At last, now, the idea of input legitimacy needs to be “unpacked,” as the phrase goes. But it is unclear how to do it, especially against the backdrop of widespread popular resentment and mistrust reflecting the failure of the earlier program. For decades now, in many democracies, muddling through has seemed the only option, even while it, too, does not really work—that is, does not transform the background structural features of the world economy that generate the muddle.

In this election year, the World Bank is not alone in hoping for a miracle.

After Neoliberalism

How the world that neoliberalism built may be unwound and rebuilt, and in a fashion that broadly preserves “actually existing democracy,” is the immediate problem for political parties in the free states. Understanding the contours of this problem requires reviewing how workers in these states have been put into economic competition with other workers, both voters and nonvoters alike.

There are three broad ways to put pressure on a country’s working class: increased international trade, increased immigration, and the in­creased use of labor-saving technologies. Increased trade puts one country’s working class into competition with another’s in the domain of tradable goods and services. Increased immigration spurs greater wage competition within the receiving country, at least in any realistic short to medium term. The introduction of labor-saving technologies puts workers into competition with machines—or, more precisely, with workers using machines that allow greater productivity (i.e., greater output for a constant labor input).

As with any policy choice, there are always “winners and losers,” as the economists never fail to blithely remind us. Freer international trade should enable cheaper goods and services from abroad, increasing the real wage, while, over the longer run, increasing tradable inputs to pro­duction may enhance productivity. Immigration should enable cheaper consumption of labor-intensive services domestically, thus increasing the real wage, as well as adding to the stock of “human capital” over the longer run. New technology should also increase the real wage of those workers who can use it, as well as offering cheaper consumption oppor­tunities to workers who do not. While some workers will therefore “win”—those with stability of employment, protected wages, or access to new technology—many others will “lose,” with downward price-pressure on their wages the predictable (often intended) result of these policy changes. Contrary to the conventional view, these losers will not be uniformly in the developed world. Within the developing world, too, different segments of workers will be competing against one another in the same fashion and with similar results—hence, the “middle-income trap” that will take a miracle to overcome.51

What is striking about the political arrangements that underlie these forms of globalized wage competition is how insulated they are from popular pressure—that is to say, from the ability of national majorities to amend or even repudiate them. The international legal arrangements behind cross-border trade flows are generally hard-coded rules with treaty arrangements providing for supranational arbitration (at the level of the WTO, the EU, or in many regional trade agreements). In the absence of something like a “World Migration Organization” (as pro­posed by economist Jagdish Bhagwati52), immigration has remained, de jure, mostly a matter of national laws. But, in practice, it has been “de‑facto transnationalized,” as Saskia Sassen has put it, in ways that remove it from national politics in significant respects. Reflecting the background pressures of economic globalization, which has altered state capacity and corresponding political identity, immigration has become largely “transnational” in effect, putting its regulation “beyond sover­eignty.”53 Finally, the decisions concerning the introduction of productivity-enhancing technology in the workplace are, to a first order of approximation, the private prerogative of management, often protected by constitutional rules concerning private property, freedom of con­tract, or freedom of association. In practice, they remain a complex matter of national administration, including in some instances worker codetermination, intersecting with international and supranational regu­lations of labor, all framed by the global economic pressures generated through multinational corporate supply chains and the possibility of offshoring.

Insulating the legal foundations of wage competition from popular control might have “worked” if input and output legitimacy had continued to buttress one another. But as they have come apart, the unresolved problem of democratic legitimation now appears as a protracted political crisis in country after country. Moreover, it is one that has been particularly difficult for liberal democracies to navigate, given their commitment to at least some measure of popular participation on key issues. It is not obvious how to “balance” input and output legitimacy, even if we were able to specify with any precision which “inputs” and “outputs” are supposed to count within each category. Is a little less popular control over trade or investment policy a good bargain for a little more GDP growth—and, if so, who gets to decide? And could more popular control over international economic policies suffice to break a global growth pattern established for decades?

The early evidence from the United States under “Bidenomics” suggests that American exceptionalism, at least, is not dead. The tacks away from neoliberal globalization begun during Donald Trump’s administration and then consolidated and sharpened by Joe Biden’s have shaped an economy that is now the exception to the rule in the developed world. The United States has had the softest landing of the OECD countries after the Covid-19 pandemic, enjoying strong overall growth, real wage gains, decreasing inequality, a strong labor market, and record small business formation. For all the handwringing on Wall Street, the last four years have been a time of record corporate profits and record manufacturing investment. The stock market is at an all-time high, but real wages are up too.54 Mirabile dictu.

Democracy against Democracy?

Evidently, even a declining hegemon retains some room for maneuver. Both the Republican and the Democratic Parties, in different ways, now offer competing versions of a post-neoliberal American political econo­my. Whether either vision can be successfully implemented, given the broken and polarized politics of the American republic, remains to be seen.55 And the United States may prove the only country able, at least in the short term, to chart a trajectory away from neoliberal globalization.

The authoritarian rivals to the United States face no such political predicament. They just need to get the trains to run (roughly) on time. Because their development strategies rely essentially on output legitimacy, they can even use it to restrict or to dodge calls for input legitimacy. And with every chaotic, contested, or just disappointing election cycle in the democratic world, authoritarian leadership seems more attractive, as recent polls of young people in the United States and elsewhere seem to suggest.56 It now even announces itself as a superior form of democracy. As Xi Jinping emphasized in 2019, China’s “whole-process people’s democracy” is nothing less than democracy “in its broadest, most genuine, and most effective form,” while democracy in the United States is now “sick.”57

The idea of China—or any other authoritarian regime—as a “democracy” requires deemphasizing the decisive institutional processes by which a people choose the makeup of their government, let alone their fundamental laws. The focus instead shifts to whether the existing government delivers desirable outcomes, often determined through local consultative and deliberative processes through which people can share grievances and ideas with their rulers. The “whole-process people’s democracy” thus sidelines democratic processes to focus on results. It also highlights the equivalent of what have elsewhere been called “listen­ing tours”—when politicians seem to open themselves up to hear, in an informal (but superintended) way, what ordinary people are thinking.

In all this, the whole-process people’s democracy is in fact following the script that neoliberalism wrote when it shifted the terms of political legitimation around the world. Economic growth, full employment, clean streets, local public goods, even listening tours and informal deliberation: is this not the dream of post-Maastricht Brussels? Only the economic growth and full employment have been missing.

The Chinese Communist Party has thus shown the way forward by boldly turning the so-called democratic deficit on its head. Redefining “democracy” proves easy enough given the shortcomings of the repre­sentative systems that marched beneath its banner during the twentieth century. First, the specific demand for democracy converts to a general call for legitimacy. Then, a focus on output legitimacy—with only a vague or flexible sense as to how desired inputs are to be arrived at—turns economic growth into a democratic success story. After all, the people have got what they wanted, which is whatever the market can provide. In an earlier era, the United States and its allies benefitted from this trompel’œil during democracy’s second and third waves.

Now it seems to be China’s turn—and without even a perfunctory nod to the institutions of actually existing democracy, like voting for parties to form national governments. For decades now, elites in the United States and Europe have had to mutter sotto voce that the demo­cratic “deficit” is not a bug but a feature of their representative systems. Chinese elites can now go further and claim out loud that the deficit is their democracy.

The worry is that the globalization of such political cynicism—“designed in California, built in China,” one is tempted to say—will undermine what is left of our imperfect democracies. The anti-democratic dispensation hidden by this rhetorical sleight of hand may one day seem attractive to voters tired of electoral campaigns that offer no solutions, only the constant threat of democracy going awry—and when no one can remember any longer what it was all supposed to be for.

We are not there yet in this election year of 2024. Billions of us around the world have ballots to cast this year, or the next, perhaps the one after. And so far, at least, the politicians still want them.

This article originally appeared in American Affairs Volume VIII, Number 4 (Winter 2024): 143–69.

Notes