Only a generation ago, the collapse of communist regimes across Central and Eastern Europe instilled a hope, even an expectation, that liberal democracy would become the dominant political system across the entire continent, even “the only game in town.” President George H.W. Bush’s call for a “Europe whole and free” represented the optimistic mindset of those early days of the post-Cold War era. With today’s hindsight, it is easy, even fashionable, to scoff at this optimism and dismiss the era’s democratic triumphalism as naïve and premature. Recent democratic backsliding and Russia’s revanchist wars have even led some to go so far as to criticize the very idea of building a “Europe whole and free” on the grounds that the West pushed its agenda too hard and too fast, thus precipitating a predictable revanche of illiberal forces.[1]

When looking back on the immediate post-Cold War period, however, what stands out is not the excessive optimism or naiveté of those embarking on democratic reforms, but rather how successful they were at establishing liberal democracy. From Tallinn to Sofia, countries that had been ruled by iron-fisted totalitarian dictatorships transformed themselves into functioning liberal democracies in a matter of just a few years, and in most cases with no prior historical experience to guide them. These successful transformations, even if imperfect, brought freedom and prosperity to tens of millions of people.[2] To criticize Western support for these transformations as geopolitically imprudent is to relegate Warsaw, Prague, and Budapest to an authoritarian sphere of influence forever.

To be sure, these nascent democracies were imperfect and had inherited a significant degree of corruption from the communist era. And as everywhere else in the world, post-communist political elites attempted to aggrandise power by using the advantages of incumbency to tilt the playing field in their favour. But the overall arc of history in that initial decade of post-communist transition tilted overwhelmingly towards liberal democracy.

While there are many reasons for this, two factors were critical: first, civil society pressure on political elites to act in accordance with democratic norms; and second, external leverage from NATO and the EU. The former pressure came from the bottom up and was marshalled by highly mobilised civic groups that had just gone through the life-altering experience of overthrowing seemingly invincible dictatorships. These civic organisations cried foul whenever efforts to abuse power came to light and were emboldened to speak truth to power. The latter form of pressure came from the top down in the form of conditionality applied through the twin processes of NATO and EU integration. As countries in the region subjected themselves to the rigorous conditions-based process of Euro-Atlantic integration, they allowed themselves to be graded on their adherence to democratic norms.

Both the top-down and bottom-up pressures were strongest in the countries of Central Europe, where organised civil societies and prospects for Euro-Atlantic integration were strongest, and weakest in former Soviet states such as Russia, Belarus, and the Central Asian republics.

Consider, for example, the case of Slovakia. When Prime Minister Vladimír Mečiar and his cronies began to concentrate power in the 1990s by using the security services to go after their political opponents, they immediately faced a harsh backlash from NATO and the EU, which made abundantly clear that such actions jeopardised Slovakia’s membership prospects. This external pressure combined with sustained civil society protests led to the regime being voted out of office. Six years later, Slovakia joined NATO and the EU.

While local circumstances were different across the region, similar combinations of bottom-up and top-down pressure kept governments in Central and Eastern Europe focused on adherence to liberal democratic norms and kept nationalist-populist demagogues like Mečiar or Poland’s Stanisław Tymiński at bay. Farther to the east, where civil societies were less well organised and the prospects of NATO and EU integration more distant (or absent), a more illiberal, oligarchic system of government predominated.

The Oligarchisation of Europe

Today, 30 years after the revolutions of 1989, the transition to liberal democracy no longer looks as certain or as linear as it did around the turn of the century. Europe has instead emerged as a battleground for what future historians may well see as the defining geopolitical conflict of the 21st century: the clash between liberal democracy and corrupt, illiberal oligarchy.[3]

In contrast to the Cold War, today’s conflict is less a contest of utopian ideologies than it is a competition between real-world political systems: one based on free and fair elections, constitutionally protected rights for individuals and minorities, and a competitive market economy; the other on the concentration of political and economic power in the hands of illiberal, oligarchic elites. The clash between these governance systems is manifested along two dimensions simultaneously: as a competition between states in the international arena and as a competition between political actors within states.

Hungary under Prime Minister Viktor Orbán provides perhaps the best illustration of how the process of “oligarchisation” works, in part because Hungary was a functioning liberal democracy in the 1990s with no indigenous oligarchs. The key to the subsequent subversion of Hungarian democracy lies in the relationship that was formed between Orbán’s political party, Fidesz, and a small number of powerful oligarchs affiliated with it. As the Corruption Research Centre in Budapest has documented, the Orbán government systematically used procurement as a means of doling out lucrative contracts to cronies tied to the ruling Fidesz party and to Orbán personally.[4] This network of cronies accumulated enormous resources in the financial, agricultural, and real estate sectors.[5] These budding oligarchs then used their newfound wealth to buy up radio stations, television channels, and newspapers, including some of the most significant opposition media in Hungary. Some, like Nepszabadsag and Magyar Nemzet, were simply shut down, while others shifted to a more progovernment stance after their ownership changed.

While these oligarchs were buying up media resources, the regime went about stacking the tax authorities, law-enforcement bodies, and courts with party loyalists. This ensured favourable treatment both for party leaders but also for regime-linked oligarchs whose wealth depended on government contracts. This gradual process of capturing independent state institutions and concentrating economic resources and political power in the hands of a small network of loyalists is emblematic of the corrupt “oligarchisation” of European politics—a phenomenon that extends well beyond Hungary.

Looking back at the last two decades of Fidesz rule, it is impossible to point to a single event that would qualify as a constitutional coup. Indeed, Fidesz was forced into opposition between 2002–2010, demonstrating that Hungary is not yet a fully “captured” authoritarian state. Nevertheless, as former Hungarian President László Sólyom has rightly put it, the rule of law in Hungary has essentially “ceased to exist.”[6] This is what makes the oligarchisation of power so insidious: it occurs in a piecemeal fashion and rarely challenges democratic principles overtly. Even Orban’s infamous embrace of “illiberal democracy” seeks to retain an element of democratic legitimacy.

This is also true of Russia, perhaps the quintessential oligarchic authoritarian state. On its face, Russia has nominally independent courts, a nominally independent parliament, nominally independent opposition parties, independent media outlets, numerous civil society organisations, and a robust private sector. In practice, of course, the Kremlin fully controls the judiciary, has co-opted all the opposition parties in parliament, and controls all broadcast television stations. Civil--society organisations deemed to be dangerous are charged as “foreign agents” while private companies are forced to pay protection money to the security services to shield themselves from hostile takeovers. In short, Russia has the institutional trappings of a market democracy and its leaders sometimes pay lip service to democratic principles, but it is in many ways its antithesis. Kremlin ideologist Vladislav Surkov captures this Potemkin quality of Russia’s democratic institutions by comparing them to a Sunday suit, “put on when visiting others, while at home we dress as we do at home.”[7]

Conditions for the Rise of Illiberal Oligarchies

 Looking back on the three decades since the end of the Cold War, the EU’s “big bang” accession of 2004 was likely the high-water mark of democratisation in Europe, bringing Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia into the EU, and most of these same countries into NATO. The period that followed, however, saw the bottom-up and top-down pressures of democratic accountability weakened as a new class of illiberal politicians started to question the post-Cold war consensus favouring liberal democracy. While many reasons could be cited, three key factors stand out during this period.

The first was the pause in Euro-Atlantic integration that followed the EU and NATO’s enlargement in 2004. Although Albania and Croatia joined NATO in 2009 and Croatia was admitted to the EU in 2013, most candidates for NATO and EU membership perceived the door closing on their aspirations after the “big bang.” European leaders expressed clear “enlargement fatigue” and the remaining aspirants came to understand their turn would not be coming for a long time. As the promise of Euro- Atlantic integration receded, the conditionality of EU membership no longer incentivised the same degree of reform, often leading to stasis or regression. Equally importantly, among the newest members of NATO and the EU, the end of the accession process diminished the leverage that had incentivised their progress to that point, making it far more likely for democratic backsliding to occur.

The second factor was the double whammy caused by the onset  of the massive financial crisis in 2008 followed by an unprecedented wave of migration into Europe beginning in late 2014. The economic upheaval pushed many southern and eastern European economies to the edge of default and caused widespread social dislocation, youth unemployment, and dashed expectations. This, in turn, led to anger directed at incumbent politicians and the EU, which was widely seen as responsible for the imbalances in the eurozone that fuelled the crash. Then, on top of this economic calamity, the mass-migration crisis fuelled a potent mix of xenophobia and populism that allowed illiberal parties to blame deteriorating economic conditions on the new wave of migrants, regardless of whether there was a direct link. This was true both in countries that lay directly along the main migration route, like Hungary and Germany, and also in peripheral countries like the Czech Republic, Slovakia, and Estonia, which admitted negligible numbers of migrants. By blaming these “others” for economic turbulence, tough times, and underlying cultural changes, illiberal forces made inroads in virtually every country in Europe.

Finally, a third factor was the generational shift that saw the moral standard-bearers of the anti-communist revolutions of 1989 replaced with a more technocratic class of professional politicians. The passing of the generation of Lennart Meri, Tadeusz Mazowiecki, and Václav Havel and the rise of a new cohort of professional politicians personified by ideological opportunists like Miloš Zeman and Milorad Dodik had a profound effect on European politics from east to west. Even within the liberal democratic mainstream this shift was discernible, as pragmatic careerists like Federica Mogherini (who joined the Italian Communist Party in 1988, just one year before communism was swept into the dustbin of history) came to dominate the political class while non-career politicians like Poland’s Adam Michnik and Germany’s Joachim Gauck retired from politics.

The Geopolitics of Oligarchic Authoritarianism

The rise of illiberal oligarchies is also part of a broader geopolitical competition, as leading oligarchic powers like Russia and, to a lesser extent, China actively seek to support illiberal and oligarchic regimes as counterweights to liberal democracies. The Kremlin’s close ties with oligarchic regimes in Hungary and Turkey are meant to undermine a “Europe whole and free” by supporting regimes that behave more like Russia. This is also why Russia supports illiberal forces that have not yet come to power. As Surkov cogently put it, “the political system that has been made in Russia is fit to serve not just future domestic needs but obviously has significant export potential. Demand for it and for certain specific components of it already exists, its experience is being studied and partially adopted, and it is being imitated by both ruling and opposition groups in many countries.”[8] Russia’s support for illiberal parties such as Lega, Vox, Jobbik, Alternative für Deutschland, or the Austrian People’s Party is but one manifestation of Vladimir Putin’s support for illiberal and nascent oligarchic forces in Europe.

Closer to home, the Kremlin has been even more aggressive about quashing incipient democratic movements and supporting pro-Russian oligarchic forces. In Georgia, the Kremlin actively opposed the democratic reforms initiated after the Rose Revolution and tried to manifest its influence through local oligarchs. When that failed, Russia ultimately resorted to the use of military force. The same is true in Ukraine, where Russia exerted control over the country’s politics through its oligarchic proxies until the Revolution of Dignity in 2014 threatened to overturn this system through democratic reform. Sensing the imminent collapse of its patronage network, Russia intervened militarily. Even in tiny Montenegro, much farther from Russia’s borders, the prospect of democratic reform through NATO and EU accession led the Kremlin to attempt a botched coup in October 2016.

Across all the frontline democracies of Eastern Europe, the Kremlin has consistently tried to undermine democratic reformers and support illiberal parties or oligarchic regimes. In Macedonia, the Kremlin supported the Gruevski government until its fall and then covertly funded protests to undermine North Macedonia’s membership in NATO. In Bosnia and Herzegovina, Moscow has actively supported nationalist-populist leaders such as Dodik to block NATO and EU-mandated reforms. In Moldova, Russia has supported illiberal oligarchs like Ilan Shor. Even in the Baltic states, which are historically much more sceptical of the Kremlin, Russia has cultivated oligarch politicians such as Latvian oligarchs Ainārs Šlesers and Aivars Lembergs.

Strengthening Liberal Democracy Against Corrupt Authoritarianism

How do European states protect their liberal democratic institutions against illiberal, oligarchic forces?

The fight against illiberal oligarchies has to begin at home with strong civil societies and politically engaged citizens taking the lead. However, these civil societies must also be supported by other democratic states, which must pool resources and tactics by banding together as part of a larger alliance of democracies. The United States, for example, has  a number of tools to fight corruption in other countries, and U.S. leadership on this issue has been vital to the success of anti-corruption efforts in frontline democracies like Ukraine, Moldova, and Romania. Whenever the U.S. and the EU have been engaged in the push for institutional reform, there has been steady progress in fighting back against entrenched, corrupt interests; conversely, when this engagement has waned, oligarchic interests have often re-asserted themselves. More aggressive use of the Global Magnitsky Act (in the U.S.) and similar European laws would also greatly increase leverage. European countries should also consider passing their own versions of the U.S. Foreign Corrupt Practices Act, which levies sharp sanctions on companies that engage in corrupt practices abroad.

Second, NATO and the EU still retain enormous collective power to influence their individual members. Although the threat of  expulsion is not credible in the absence of clear mechanisms for removing illiberal members, withholding benefits and bringing pressure to bear on corrupt, illiberal regimes can still have a powerful, galvanising effect.

Equally important is reducing the loopholes and  vulnerabilities  that allow foreign powers like Russia and China to channel dark money to politicians, NGOs, and political parties. Campaign finance reform to ensure maximum transparency regarding funding for candidates and parties is critical, as are stronger anti-money laundering efforts. Transparency regarding government services and procurement, following the Scandinavian model, would also help reduce the scope of corruption by exposing government actors to more scrutiny and accountability. Intelligence and law-enforcement cooperation across Europe—with active U.S. participation—can also help target notoriously corrupt actors such as Eurasian organised crime figures, whose penetration of European jurisdictions from Monaco to Montenegro remains a significant threat and sometimes also a vector for foreign state influence.

Finally, American and European leaders must rally their citizens to defend their democracies from the creeping influence of illiberal and oligarchic forces. Unless Western leaders start taking more active steps to counter illiberal kleptocracies and get serious about building their own countries’ resilience to corruption and foreign corrupt influence, more European states may well succumb to the Hungarian model. Europeans may not realize it yet, but a spectre is haunting Europe—the spectre of illiberal democracy and oligarchy. If the transatlantic community does not take urgent action to counter it, the dream of a “Europe whole and free” will soon slip out of our reach.

[1] See, for example: J.J. Mearsheimer, “Why the Ukraine Crisis Is the West’s Fault,” Foreign Affairs, September/October 2014, www.foreignaffairs.com/articles/russia-fsu/2014-08-18/why-ukraine-crisis-west-s-fault.

[2] In Poland, for example, GDP per capita has increased by almost 150% since1989.

[3] By oligarchy, I mean a governance system in which political power and economic resources are concentrated in the hands of a narrow elite bound together by close personal ties. Typically, an oligarchic system is formed when powerful government officials and business tycoons (“oligarchs”) establish a symbiotic relationship to monopolise government and private sector resources. Oligarchies can coexist in some cases with democratic institutions, as in today’s Ukraine or Moldova, but usually tend towards authoritarian rule, as in today’s Russia.

[4] I.J. Tóth, M. Hajdu, Intensity of Competition, Corruption Risks and Price Distortion in the Hungarian Public Procurement – 2009–2016, Budapest, Corruption Research Centre, December 2017, www.crcb.eu/wp-content/uploads/2017/12/eu_hpp_2016_report_170616_.pdf.

[5] N. Buckley, A. Byrne, “Viktor Orban’s oligarchs: a new elite emerges in Hungary,” Financial Times, 21 December 2017, www.ft.com/content/ecf6fb4e-d900-11e7-a039-c64b1c09b482.

[6] Quoted in: J. Rupnik, “Explaining Eastern Europe: The Crisis of Liberalism,” Journal of Democracy, July 2018, pp. 24–38, www.journalofdemocracy.org/articles/explaining-eastern-europe-the-crisis-of-liberalism.

[7] V. Surkov, “Putin’s Long State,” Nezavisimaya Gazeta, 2 February 2019. I have used the translation provided by Dmitry Orlov, https://thesaker.is/putins-lastingstate-translated-by-dmitri-orlov.

[8] Ibidem.