national populism and slovak – hungarian relations in - MEK

Argentina on the Danube...of the majority (Olson, 1965). Most interest groups are well organized andfocus on concrete areas in which they strive to bend the rules in their favourthat subsequently bring significant and concentrated profits to (a limitednumber of) their members while only slightly increasing the costs borne bya large number of unorganized majority members. Even in most developeddemocracies, the greatest problem is that particular interests of too manylobby groups tend to form a cobweb around government, paralyzing effectiveresource allocation, hindering economic growth and causing the economyto operate below its potential.Practically since the dawn of modern democracies, political and economicthinkers realized that this form of government – even though theyconsidered it the best of available options – may not guarantee effectiveeconomic policy that will secure sustainable development. The greatestproblems of democracy stemmed primarily from the model of majority votingbut also from existence of interest groups. The single most importantchallenge central European democracies are facing today is the phenomenonof populism. The goal of the present study is to analyze its economicpillar, i.e. populist economic policy. I believe that its principal vital forceis continuous demand for such policy on the part of voters, which is closelyrelated to the already described basic problem of the democratic systemof government, i.e. majority voting.The opening part of the study defines populist economic policy andcompares its Central European modification to the ‘classic’ Latin Americanversion. The second part will demonstrate why this kind of economic policy(especially its most important segment, i.e. fiscal expansion) is completelyineffective and even destructive for small and open economies inCentral Europe. The final part tries to find an answer to the question ofwhy political leaders keep reviving this policy despite its proven ineffectivenessand harmfulness. That answer is the already mentioned demand onthe part of voters that ensues from a blend of rational interests of the government-financedmajority and economic values, concepts and preferencesof a substantial part of the population that are irrational from the viewpointof mainstream economy.Phenomenon of Populist Economic PolicyWhile is quite problematic to define the phenomenon of populism in general,4 its economic mutation is easier to describe. For the purposes of thepresent study, economic populism shall entail pursuance of such policiesthat do not hesitate to sacrifice the country’s long-term economic stabilityNational Populism and Slovak – Hungarian Relations in Slovakia 2006 – 2009. Forum Minority Research Institute Šamorín – Somorja, 2009183