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From Duterte to Orbán: the political economy of autocratic hedging

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Abstract

How do autocracies survive? We argue that autocrats pursue a two-step strategy of autocratic hedging to ward off international pressure, diminish the power of domestic rivals, and consolidate their positions. First, autocrats who successfully "hedge" against critics do this by seeking rebalancers, such as firms or foreign leaders, who can redirect capital towards the autocrat's economy and break apart coalitional challengers. Second, autocrats use inducements, ambiguity, and mass mobilization to manipulate international conditions in their favor to avoid isolation and maintain legitimacy. Drawing on interviews in the field and secondary research, we illustrate our concept of autocratic hedging using the Philippines' Rodrigo Duterte (2016-2022) and Hungary's Viktor Orbán (2010-). Going beyond the existing literature that focuses on how autocrats stifle domestic pressure or use institutional features of the regime to stay in power, we develop an interactive framework that shows how autocratic hedging has allowed some rulers to place international capital in the service of the autocrat's power consolidation. Furthermore, most studies explain autocratic survival by using the state as the unit of analysis. In contrast, this article finds that multiple levels of interaction among rulers, firms, domestic constituencies, and foreign leaders matter to autocratic hedging and survival.

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Data Availability Statement

The participants of this study did not give written consent for their data to be shared publicly, so due to the sensitive nature of the research supporting data is not available.

Notes

  1. In international relations, external rebalancers can also be called competing powers (see Goh 2007a; Liao & Dang 2020)

  2. Our case justification can be found in a later section.

  3. See “Negotiations between Putin and the Hungarian opposition leader?” in Hungarian Spectrum, 24 November 2009, available at: https://hungarianspectrum.org/2009/11/24/negotiations-between-putin-and-hungarian-opposition-leader/. Accessed 18 October 2022.

  4. Slater developed the three mechanisms of packing, enticing, and circumventing to describe Mahathir’s bossist regime with prominent strongmen features.

  5. National Economic Development Authority, Senior Economic Development Specialist, Manila, 16 September 2019

  6. Duterte’s Former Adviser, Manila, 15 September 2019

  7. The Philippines landed a significant international victory against China. This PCA ruling could have led to institutionalized accords on maritime domains and territorial disputes at the regional or the international level. However, Duterte’s about-face gave the Chinese Navy time to complete island bases in the South China Sea. These new “Chinese territories” nullify any advantages that US aircraft carriers bring to the table if war occurs.

  8. See JICA, https://www.jica.go.jp/philippine/english/index.html. accessed 9 May 2022.

  9. See Department of Trade and Industry. https://www.dti.gov.ph/resources/laws-and-policies/investment/. accessed 9 May 2022.

  10. Interview, Public Relations Manager, Bank of America, Makati City, 15 Jan 2020.

  11. Interview, US Investor, Concentrix, Makati City, 15 Jan 2020.

  12. Interview, Delegate, EU, Makati City, 19 Jan 2020.

  13. See Stubnya Bence, “When the government doesn’t fight the multis, it stuffs them with money,” Index.hu, 12 September 2016, available at: https://index.hu/gazdasag/2016/09/12/beruhazas_allami_tamogatas_multi/; and BudapestBeacon, “German companies get lion’s share of Hungarian state subsidies,” 17 September 2016, available at: https://budapestbeacon.com/german-companies-get-lions-share-of-hungarian-state-subsidies-since-2004/; both accessed 9 May 2022. See the BBC, “Hungary’s Index journalists walk out over sacking,” 24 July 2020, available at: https://budapestbeacon.com/german-companies-get-lions-share-of-hungarian-state-subsidies-since-2004/; accessed 9 May 2022.

  14. Szabolcs Panyi, “How Orbán played Germany, Europe’s great power,” direct36.hu, 18 September 2020, available at: How Orban played Germany, Europe's great power | Direkt36; accessed 9 May 2022.

  15. Interview, Delegate, EU, Makati City, 18 September 2019.

  16. Interview, Representative, US Chamber of Commerce, Washington DC, 18 February 2021.

  17. See Sebastian Shehadi, “How German automotive investment in Hungary exposes the dark reality of globalisation,” Investment Monitor, 8 October 2021, available at: https://www.investmentmonitor.ai/analysis/german-automotive-investment-hungary-orban. Accessed 9 May 2022.

  18. Sebastian Shehadi, “Opinion: Foreign investors have helped Orbán to destroy Hungary’s free press,” Investment Monitor, 12 April 2022, available at: https://www.investmentmonitor.ai/insights/foreign-investors-orban-hungary-free-press. Accessed 9 May 2022.

  19. See Aseanpost, https://theaseanpost.com/duterte-youth. Accessed 9 May 2022.

  20. Human Rights, Watch, Philippines: Witnesses Retract Testimony Against Duterte Critic, 4 May 2022, https://www.hrw.org/news/2022/05/04/philippines-witnesses-retract-testimony-against-duterte-critic.

  21. Interview, Marites Vitug, Rappler, Editor in Chief, 15 August 2020.

  22. Dorottya Szikra and Mitchell A. Orenstein, “Why Orbán Won Again,” Project Syndicate, 5 April 2022, available at: https://www.project-syndicate.org/commentary/orban-victory-in-hungary-reflects-popular-economic-policies-by-dorottya-szikra-and-mitchell-a-orenstein-2022-04. Accessed 10 May 2022.

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Acknowledgements

We would like to thank József Péter Martin and two anonymous reviewers at JIRD for their comments on an earlier draft of this manuscript. In addition, we thank the interviewees who generously offered their knowledge during our field research. We are also grateful to the guest editors for inviting us to be part of this special issue. All errors are our own.

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Camba, A., Epstein, R.A. From Duterte to Orbán: the political economy of autocratic hedging. J Int Relat Dev 26, 347–372 (2023). https://doi.org/10.1057/s41268-022-00287-7

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