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
Zsolt Gál in return for short-term political gains. By short-term political gains, we refer especially to popularity of political parties and their leaders that shows in elections and is subsequently reflected in political mandate and participation in power. Principal indicators of popularity include public opinion polls, election results and ensuing distribution of mandates in various elected bodies. By long-term economic stability, we refer particularly to balanced and sustainable economic growth of a country and ensuing growth in citizens’ standard of living; it makes a lot of sense to monitor this development in relative comparison to other countries. The macroeconomic growth is balanced and sustainable as long as it does not cause substantial internal or external economic imbalances, i.e. it is not achieved at the expense of ballooning budgetary and/or balance-ofpayments deficits that lead to a substantial increase in internal and external indebtedness. Simultaneously, on the microeconomic level the economy must avoid a significant increase in the total volume of (inter)corporate debts or overdue claims among financial institutions. Central and Eastern European (CEE) countries traditionally suffer from the lack of (local) capital, which is why they had to rely largely on foreign capital since the beginning of transformation. Consequently, the growth in their budgetary deficits and public debt goes usually hand in hand with ballooning balance-of-payments deficit and foreign indebtedness; this leads to parallel deficits experts refer to as double deficit. Principal indicators of (un)balanced and (un)sustainable growth include especially deficits of public budgets and the balance of payments as well as public and foreign debts, but also corporate debts on the microeconomic level. The principal features of populist economic policies Slovakia and Hungary pursued over the past two decades included excessive (explicit and/or implicit) budgetary deficits and simultaneously occurring high balance-of-payments deficits that led to an enormous growth in public and foreign debts and brought both countries on the verge of economic collapse. What followed was stabilization through restrictive fiscal policy measures and structural reforms with painful social effects (at least short-term) that usually required assistance from international institutions. This cycle of populist policy strongly resembles economic experiments various Latin American countries carried out since the 1970s. Another similarity is that both categories of countries caught up with economically developed countries with a varying degree of success. Therefore, it may be interesting to learn about basic hallmarks of the ‘classic’ Latin American populism. In May 1990, the Inter-American Development Bank played host to a conference on Latin American populism; proceedings from the conference 184
