Petőcz Kálmán (szerk.): National Populism and Slovak - Hungarian Relations in Slovakia 2006-2009 (Somorja, 2009)
Zsolt Gál: Argentina on the Danube - Populist Economic Policy as the Biggest Enemy of Sustainable Economic Growth
Argentina on the Danube... ket-fmanced and government-financed people, economic populism did not have as devastating effects on Sweden as it had on some CEE countries. How is this possible? Again, there are several plausible explanations:- Due to traditionally strong taxation discipline, Sweden was usually able to cover its hefty public expenditures from tax revenues. People in CEE countries are much less willing to pay high taxes and contributions. During periods of fiscal expansion, the ratio of public expenditures to GDP in Slovakia and Hungary reached Swedish levels (i.e. around or over 50%) but the ratio of public revenues to GDP remained 7 to 10 percent lower, which led to enormous deficits and ballooning debt.- Scandinavian countries regularly rank on top of various statistics measuring corruption prevalence, i.e. they have the lowest corruption rate in the world in the long term. Consequently, they can afford to redistribute half of their national income through public budgets without having to fear embezzlement, misappropriation and corruption. The situation is quite different in CEE countries that regularly rank several dozens of places below Scandinavian countries in corruption statistics.- Abusing welfare benefits is a relatively rare phenomenon in Sweden, largely due to long-cultivated social ethics. On the other hand, a significant share of Central European countries’ population was socialized during the communist regime. Here, people did not perceive stealing from the state as something condemnable but rather as savoir-faire or a necessary evil that allowed one to survive in difficult conditions; in fact, they invented many popular sayings such as “If you don’t steal, you steal from your own family”. An alternative (or rather complementary) hypothesis to explain high voter support for populist economic policy is the model of irrational voters. In his book titled The Myth of the Rational Voter: Why Democracies Choose Bad Policies, Bryan Caplan argues that the main reason why democracies adopt bad policies is irrationality of (most) voters; in other words, democracies fail because they do exactly what the majority of voters want them to (Caplan, 2007, pp. 1 - 3). According to Caplan, the views of the American public are biased and erroneous in many respects when juxtaposed to findings of economic science; the problem is that voters in polling stations often decide based on these erroneous concepts and popular myths.16 In CEE countries one may also find several erroneous views, values and visions that strongly influence voters’ decision-making: Paternalism, egalitarianism and etatism: People in these countries are convinced that government’s attempts to meddle with economy and take care of citizens are necessary, correct and successful. Here, governments are 205
