Election Season

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It has been clear for some time that 2024 will go down in history as the year of elections, and the initial results are beginning to appear. The past ten days have featured elections in Mexico, India, and South Africa, while elections for the European Union parliament are going on as this column is being written. When all are finished this year, more than one billion people will have voted.

The good news is that democracy appears to be alive and well, at least for the time being. The countries where elections are over had large turnouts and in one case unexpected results. The people are speaking, but whether anything will change remains to be seen. In this week’s column I will suggest a common thread in the three elections just finished and then discuss what we might see in these countries as their new, or semi-new, governments take over. There are always many factors that influence an election, and it is rare that only one is decisive. That appears to be true this year, but it does seem like populist economic issues are playing an important role in all three of the countries in question.

In Mexico, the winner was, as expected, the Morena party’s candidate, Claudia Sheinbaum. The vote for her, and the strong vote for Morena congressional candidates, reflects the popularity of the outgoing president, Andrés Manuel López Obrador (AMLO), who was the most populist president Mexico has seen in decades and who provided strong support for and benefits to workers. While Sheinbaum is more of a technocrat than AMLO, she is expected to continue his policies. That may not be good news for the United States, as it has a growing number of bilateral trade issues with Mexico, including some old ones on energy and GMO corn, and some news ones such as Mexico’s potential treatment of e-commerce retail service providers and the looming possibility of Chinese investment in electric vehicle manufacturing in Mexico. With the United States-Mexico-Canada Agreement (USMCA) coming up for review and renewal in 2026, all these issues will be on the table.

The Indian election was a surprise, as the ruling Bharatiya Janata Party (BJP) was widely expected to expand its majority. Instead, it lost it and will now have to govern via a coalition with other parties. That outcome appears to be the result of poor people, both Hindu and Muslim, unhappy with the government’s failure to deliver on promises of higher wages and other economic benefits. The BJP ran a divisive campaign that emphasized Hindu-Muslim tensions, but the clear message from voters was that economics was more important. The outcome, however, may not produce much change. Modi will remain prime minister and will likely pursue the same economic policies he has been pursuing, which have made India the fastest-growing large economy in the world. Either not fast enough, apparently, for people at the bottom of the economic food chain, or the benefits of growth are not reaching everybody.

The South African election was not a surprise. The African National Congress (ANC) was widely expected to lose its majority, and it did. The result, as in the case of India, will be a coalition government, although the form of the coalition is less certain than in India. As in India, voter dissatisfaction with the current government seems to have been driven by its failure to deliver economic benefits to the poorer parts of South African society as well as corruption in the government. At this point it is not clear whether the result will lead to significantly different economic policies. If the ANC allies with the Democratic Alliance, a party with ties to the white business community, more business-friendly policies have a shot. The other alternatives are alliances with parties to the left of the ANC which would advocate more populist policies.

I think we can draw several conclusions from the three elections. First, economic grievances played an important role in all of them. In Mexico, voters were happy their grievances were being addressed. In India and South Africa, voters were unhappy that the same grievances had not been addressed. In all three cases, the degree of satisfaction, or lack thereof, made a difference in the outcome. Second, the electorate reflected some populist economic themes that are echoed in U.S. trade policy—trickle-down economics doesn’t work, and ordinary workers inevitably get the short end of the stick. Third, despite the message from the voters, government economic policies may not change that much. In Mexico, the message was policy continuity, so change will likely be at the margins. In India and South Africa, the message was change, but the leadership of the new governments will be much the same as the old, so dramatic change in economic policy is unlikely. The old cliché, the more things change, the more they stay the same, seems to apply here. We shall see whether the same will be true in the other elections this year.

William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.