Beat the elite or concede defeat? Populist problem (re-)representations of international financial disputes

Abstract

Many populist leaders politicise disputes with external financial ‘elites’, but most are forced by economic pressures to fundamentally change their ‘people-versus-elite’ problem representations and ‘concede defeat’. Notable exceptions are Hungary’s Viktor Orbán, Argentina’s Cristina Kirchner, and Turkey’s Recep Tayyip Erdoğan, who sooner or later resisted strong push-back and defied the IMF or distressed-debt funds. These instances of prolonged populist defiance differ widely across commonly used structural and agential explanatory factors at international, domestic, and individual levels. To explain how Orbán, Kirchner, and Erdoğan managed to ‘beat the elite’, this paper clusters several root causes into a parsimonious framework of two intervening variables. The temporality of strong ‘elite’ push-back and the openness of advisory systems are theorised as shaping distinct cognitive mechanisms of representational continuity or change, through which ‘people-versus-elite’ input is either preserved until – or discarded before – feeding into decision outputs. As the two-by-two matrix of early/later external shocks and open/closed inner circles explains, Orbán did not move beyond marginal representational adjustments; Kirchner’s contingent representational fluidity benefited from opportune situational developments; and Erdoğan defied significant socio-economic cost with fundamental representational continuity. These insights highlight the potential of studying populism at the intersection of foreign policy analysis and international political economy.

Video Abstract

Introduction

Populist government leaders are destined to experience cognitive dissonances. Their antagonistic ‘people-versus-elite’ interpretative frameworks foreclose any compromise,¹ but few populists ever accumulate enough power to fully implement their self-proclaimed ‘will of the people’.² This dilemma becomes particularly evident when populism in office challenges the constraints of the global financial system: international financial institutions (IFIs), credit-rating agencies, venture capital firms, or other investors frequently are perceived as powerful and mal-intended ‘elites’ and have been antagonised by progressive and conservative populist led-governments worldwide.³ But when external ‘elites’ (threaten to) impose financial or legal sanctions, and when bond markets dry up, the currency crashes, liquidity drains, or forex reserves dwindle, there is little populists can do by mobilising the (impoverished) domestic ‘people’ against international ‘financial circles’.

Most striking was the case of Alexis Tsipras in Greece in 2015, who initially proclaimed a defiant fight for dignity against ‘Troika’ institutions but fundamentally revisited his antagonistic interpretation and capitulated in the face of an imminent socio-economic meltdown.⁴ Three years later, the Italian coalition leaders of the Movimento 5 Stelle (M5S) and Lega government got off relatively lightly in a budgetary battle with the European Commission (EC), but only after spiking bond yields changed their outlook from categorical confrontation to creative compromise.⁵ And when persistent financial instability forced Pakistan’s Imran Khan to break his promises to rather die than beg the International Monetary Fund (IMF) for money, it was cold comfort that some alternative funding from China and Arab states had allowed him to defer ‘conceding defeat’ for twice as long (some 10 months in 2018–19) as Tsipras.⁶ These examples suggest that costly push-back from IFIs or capital markets usually forces populist decision-makers to shed ‘people-versus-elite’ interpretations and make significant concessions. In populist foreign policy (PFP),⁷ more often than not economic pragmatism prevails.⁸

However, the years since the 2007–8 global financial crisis have witnessed three notable exceptions in which populist leaders from Hungary, Argentina, and Turkey did make firm decisions to ‘beat the elite’, despite strong external headwind. From 2010 to 2013, Viktor Orbán maintained an antagonistic stance throughout a ‘surprisingly successful resistance … to many of the economic and political pressures emanating from the IMF and EU’.⁹ In 2014, Cristina Kirchner accepted sovereign default ratings rather than following a judicial order to pay distressed-debt funds. As Alejandro Vanoli, who that year became Argentina’s central bank governor, later wrote: ‘We fought an epic battle against the external and internal vultures, combatting and defeating speculation … We did not give in; they could not break us.’¹⁰ More recently, Recep Tayyip Erdoğan has also ‘accused the West of waging “economic war” against Turkey’.¹¹ For an entire presidential term (2018–23), the ‘rejection of an IMF program at all costs constituted a hallmark of the government’s approach to and disdain for Western-led institutions’.¹² Altogether, three right- or left-wing populist leaders from Europe, Latin America, and the Middle East politicised financially costly disputes with a similar ‘people-versus-elite’ logic – and did walk their talk.

These notable cases of prolonged populist defiance differ widely across common explanatory variables. Turkey as a geo-economic middle power, Hungary as a smaller state, and Argentina somewhere in between have different systemic positions. Their populist-led governments also operated in diverging, adverse, or favourable, cyclical constellations. Orbán was elected in 2010 after Hungary had been the first European Union (EU) member to request aid from IFIs in the global financial crisis and had not yet achieved an economic recovery. With Kirchner’s 2011 re-election victory, years of high Argentine growth rates gave way to prolonged stagnation and, since 2013, less favourable terms of trade. In contrast, Erdoğan’s escalated anti-IMF politicisation was preceded by years of robust, externally financed, GDP growth (reaching 7.5 per cent in 2017).

Furthermore, the triggers and actors of strong external pressures differed. Despite strong criticism from the IMF and EC, Orbán’s financial headaches only became acute when the European debt crisis of 2011 brought spillover effects on the capital markets. In the decade-long judicialised dispute between Kirchner governments and particular distressed-debt funds, it was a series of ‘bureaucratic’ rulings by US judges that finally raised the spectre of another Argentine default. And the Turkish economy suffered sudden spikes in capital flight due to Erdoğan’s primarily self-provoked erosion of investor confidence. Domestically, Argentina’s liberal democratic safeguards had proven resilient, whereas Hungary and Turkey were sliding towards competitive authoritarianism. Finally, Kirchner, Orbán, and Erdoğan do not consistently share personality traits that would predispose them more towards confrontational policies than mainstream leaders.¹³

This diversity implies that various conjunctures of structural and agential factors enabled Orbán, Kirchner, and Erdoğan to push through their proclaimed ‘will of the people’ against ‘elite’ push-back. These cases share a common driving force (populist ideas) and similar policy outcomes (prolonged defiance) but differ across several causal factors influencing the processes between ideational input and decision output. While the three leaders clearly take pride in ‘beating the IMF’ or ‘defying the vultures’, it is less clear how they accomplished those feats. The goal of this study is to explain three distinct cognitive mechanisms through which Orbán, Kirchner, and Erdoğan ultimately implemented ‘people-versus-elite’ ideas in prolonged confrontation. To that end, the paper reduces the complexity of several root causes to a parsimonious leader-centred explanatory framework of two intervening variables.

The argument adopts a foreign policy analysis (FPA) perspective, which is ‘parsimonious in that other factors and contexts can be funneled through the subjective understanding of the decision-maker’.¹⁴ International political economy (IPE) scholarship certainly argues that systemic and cyclical power constellations provide governments with material resources (or not), but also differentiates that what these means mean for policy remains leader-specific.¹⁵ Especially when it comes to populist governments, the ‘personalistic nature of much of populism justifies a focus on leadership’¹⁶ and ‘makes insights on individual choice … particularly relevant’.¹⁷ To capture populist leaders’ ‘own understandings of people versus elite’,¹⁸ this study integrates FPA’s cognitive problem representation literature¹⁹ with an ideational conceptualisation of populist ‘people-versus-elite’ lenses.²⁰

The links between populist ideas and confrontational or cooperative policy outcomes are theorised as cognitive mechanisms of continuity or change in ‘people-versus-elite’ problem representations. To elucidate how variation in those mental processes is shaped by two intervening variables, a political-strategic conceptualisation of populist agency in power²¹ is combined with selected FPA notions. The political-strategic approach explains policy outcomes as conditioned by countermeasures from the antagonised ‘elites’ and by a populist leader’s personalistic predominance. Regarding countermeasures, research into problem re-representation assumes that leaders’ individual sensitivity to negative feedback varies depending on the temporality of dealing with an issue.²² Concerning personalistic predominance, group decision-making literature argues that the extent of negative feedback presented to leaders varies depending on the openness (i.e. pluralistic or homogeneous composition) of their advisory system.²³

The proposed intervening variables rest on the FPA tenet that causality is not limited to strictly exogenous root causes but rather transmitted through contingent structure–agency interactions.²⁴ While strong external pressures in financial disputes are a complex function of systemic and cyclical structures in interplay with the individual or collective agency of IFIs, judges, or investors, this study asks whether these interactions result in early or later push-back after the leader’s initial ‘people-versus-elite’ representation. The second question focuses on whether a populist decision-maker’s leadership style of operating within large-scale domestic institutional structures translates into small-scale open or closed advisory systems (Figure 1).

Note: Core components of the analytical framework are depicted in bold.

Figure 1. Explaining representational continuity or change in populist decision-making.

The resulting two-by-two matrix of early/later external shocks and open/closed inner circles plausibly explains why many populist decision-makers fundamentally change their antagonistic problem representations and embrace cooperation, but some display alternative patterns that can result in prolonged confrontation: Orbán did not move beyond marginal representational adjustments; Kirchner’s contingent representational fluidity benefited from opportune situational developments; and Erdoğan defied significant socio-economic cost with fundamental representational continuity.

The remaining seven sections proceed as follows. First, the paper is located in the International Relations (IR) literature as integrating FPA and IPE literatures with ideational and political-strategic approaches to populism. Next, a three-tiered theoretical argument conceptualises populist problem representations, introduces two drivers of representational continuity or change, and specifies the resulting two-by-two matrix. The following section conducts a structured, focused comparison.²⁵ While the mechanism behind frequently observed cases of ‘conceding defeat’ (e.g., Tsipras, the M5S-Lega coalition, or Khan) is anecdotally exemplified in Robert Fico’s first premiership in Slovakia, the empirical focus rests on tracing three alternative processes, through which populists can ‘beat the elite’, in the diverse case sample of Orbán, Kirchner, and Erdoğan. The following comparative discussion highlights key takeaways and qualifies them with brief references to controlling cases of (foreign) economic policy in Ecuador, the United Kingdom, and Venezuela. The final section concludes.

An integrative perspective on populist agency in international financial disputes

The populist dilemma between antagonistic ideas to ‘beat the elite’ and material pressures to ‘concede defeat’ is particularly pronounced in external affairs. However, much of the vibrant PFP literature²⁶ either focuses on the ‘no compromise’ disposition or highlights power constraints. Many studies analyse the discursively constructed ideational input of ‘people-versus-elite’ lenses²⁷ or explore the ambivalent, mixed record of PFP decision output.²⁸ Some articles strike an even balance but adopt broad (comparative) perspectives on dominant populist narratives and track records across substantive areas, rather than zooming in on particular issues.²⁹ Moving towards more issue specificity is an important next step, because populist leaders tend to politicise ‘selected international issues [and] disputes with specific international actors’,³⁰ and outcomes ‘are expected to vary depending on the type of policy domain in question’.³¹

Focusing on financial disputes, this paper explains how Orbán, Kirchner, and Erdoğan exceptionally succeeded in pushing through their self-proclaimed ‘will of the people’ against strong external push-back. Systematically unboxing ‘the ways in which populist politicisation … impacts foreign policy outcomes’ not only advances the PFP literature,³² but more broadly refines cross-regional populism studies with an issue-specific focus on individual decision-making mechanisms.³³ In so doing, the paper integrates FPA and IPE as well as ideational and political-strategic approaches to populism.

Integrating foreign policy analysis and international political economy

This study is located at the intersection of FPA’s actor-specific decision-making focus and a substantive IPE topic, where truly integrative research has remained scarce. While FPA has an empirical predilection for security and defence, IPE hardly ever applies FPA models to political economy questions.³⁴ But if populism is a political by-product of (discontent with) the globalised liberal economic order and has become ‘less an aberration than a constitutive feature of contemporary world politics’,³⁵ then analysing populist agency in foreign economic policy offers a fruitful avenue towards more FPA–IPE integration.

Most articles moving in this direction focus on trade,³⁶ whereas existing IPE research into the financial disputes of Orbán, Kirchner, and others typically integrates neither concepts of populism nor FPA models.³⁷ To be fair, FPA scholars themselves have not yet fully applied their theoretical toolbox, and particularly its cognitive approaches, to PFP.³⁸ Connecting FPA’s problem representation literature with populism and applying it to an IPE domain thus breaks new ground.³⁹ From an even broader IR perspective, this paper blends – and adds leader-specific, psychological nuance to – constructivist perspectives on ideas and narratives, liberal arguments about institutional set-ups, and neoclassical realist efforts to integrate international and domestic factors.⁴⁰

Integrating ideational and political-strategic approaches to populism

Several coexisting conceptualisations of populism foreground different aspects of a multifaceted phenomenon. The ideational⁴¹ and discursive approaches⁴² elucidate how actors mentally perceive or construct political issues as ‘people-versus-elite’ antagonisms. Political-strategic⁴³ and sociocultural notions⁴⁴ foreground how leaders exercise power or perform relational leader–follower identities. Assuming that ‘individuals and groups are driven by mixed motives’,⁴⁵ the question becomes how the different dimensions of populist leadership interact with each other.

PFP studies typically adopt one conceptualisation (mainly the ideational perspective), rather than combining different ones.⁴⁶ For instance, most research on ‘people-versus-elite’ politicisation privileges ideational⁴⁷ or discursive⁴⁸ approaches. But a more eclectic perspective emerges when combining discursive and political-strategic lenses.⁴⁹ Other PFP scholars explore the complex dynamics of populist legitimation,⁵⁰ or performances of authenticity,⁵¹ by merging the sociocultural approach with discursive or ideational concepts, respectively. This paper fills another gap by integrating ideational and political-strategic notions. While the former captures the antagonistic input of ‘people-versus-elite’ ideas, the latter explains how populist leadership produces policy outputs (Table 1). The following sections connect populist decision-makers’ ideational problem representations with political-strategic drivers of representational continuity or change.

Table 1. Integrating approaches to populism in IR.

^a David Cadier, ‘Foreign policy as the continuation of domestic politics by other means: Pathways and patterns of populist politicization’, Foreign Policy Analysis, 20:1 (2024), pp. 1–21.

^b Corina Lacatus and Gustav Meibauer, “‘Saying it like it is”: Right-wing populism, international politics, and the performance of authenticity’, The British Journal of Politics and International Relations, 24:3 (2022), pp. 437–57.

^c Daniel F. Wajner, ‘The populist way out: Why contemporary populist leaders seek transnational legitimation’, The British Journal of Politics and International Relations, 24:3 (2022), pp. 416–36.

Ideational problem representations

A problem occurs when a goal cannot be obtained because of some type of barrier. In cognitive terms, problems involve perceived discrepancies between a desired and experienced state of affairs, giving rise to a sense of potential gain or loss.⁵² Decision-makers understand problems through situationally activated cognitive concepts which shape how external stimuli are filtered and interpreted. Integrating current information with preconceived ideas, leaders construct mental models to define and navigate through complex task environments, such as those posed by international issues. The resulting problem representations provide cognitively efficient interpretative frameworks of otherwise ambivalent and overwhelming choice situations.⁵³

From cognition to decision-making

Constructing problem representations involves three key steps. The most fundamental one entails defining issue-specific goals: what are the values or interests that decision-makers seek to defend or achieve? Second, individuals identify and interpret the relevant constraints which pose the problem as they understand it.⁵⁴ At this step, foreign policymakers often draw on preconceived images of external actors to diagnose their nature, intentions, and capabilities:⁵⁵ How are counterparts or opponents characterised? Closely related, the situation is located in cognitive categories such as opportunity/threat, cooperation/conflict, or political/technical choices: what kind of problem is one dealing with?

The interpretative lenses of goals, constraints, and categories inform how individuals understand the meaning of different behavioural options. Problem representations point decision-makers towards viable solutions and predispose them against contemplating contradictory policies.⁵⁶ The cognitive building blocks of a leader’s mental model explain ‘why certain options are perceived as plausible (and are therefore placed on the table for consideration) and why others are not even considered’.⁵⁷ Theorised as feeding cognitive input into decision output, problem representations should manifest themselves in policy makers’ ‘concrete behavior, verbal behavior advocating what they would like to see happen (advocated behavior), or some combination of both’.⁵⁸

‘People-versus-elite’ representations and international conflicts

Populism is no necessary ingredient of dichotomous ‘good-or-bad’ representations,⁵⁹ but moralistic ‘people-versus-elite’ ideas should structure particularly clear-cut and antagonistic models.⁶⁰ This becomes clear by mapping the core concepts of an ideational approach to populism onto the three building blocks of problem representations. Populist ideas originate in the belief that the values and interests of ordinary citizens converge towards one exclusively legitimate ‘will of the people’. Substantive contents vary by national contexts and the leader’s programmatic preferences, but what distinguishes populist from pluralist ideas is the non-negotiable conviction that the sacred ‘common good’ cannot be limited by anything. The moral mission of populist representations consists of pushing a preconceived ‘will of the people’ through no matter what.⁶¹

At the heart of populist interpretative frameworks lies ‘the existence of powerful minorities, which in one way or another are obstructing the will of the common people’.⁶² For populism, the intentional pursuit of special interests by ‘the establishment’ constitutes the problem.⁶³ Depending on which actors are situationally perceived to constrain the exclusively legitimate ‘will of the people’, populist minds may identify and demonise (the links between) different domestic and foreign ‘elite’ enemies. In the 21st century, public IFIs or private investors have frequently evoked images of rapacious, anti-popular financial circles.⁶⁴

Most decision-makers see little sense in accommodating powerful and mal-intended, threatening opponents.⁶⁵ This resonates with the moralistic ‘all-or-nothing logic’ of populism, according to which problem-solving ‘is fundamentally about will and decision … against an enemy who should be defeated’.⁶⁶ A ‘people-versus-elite’ model ‘presents a Manichean outlook’ in which opponents ‘are not just people with different priorities and values, they are evil! Consequently, compromise is impossible.’⁶⁷ In populist representations, the sacred ‘will of the people’ (goal) must be pushed through against ‘evil elites’ (constraint) in an antagonistic conflict for popular sovereignty (category).⁶⁸ Such ‘people-versus-elite’ frameworks could fixate populist decision-makers on confrontational options and thereby fuel international conflicts.⁶⁹

Political-strategic drivers of representational continuity or change

‘People-versus-elite’ mental models do ‘not automatically lead to foreign policies that are … less amenable to compromise’.⁷⁰ The political-strategic approach, which defines populism as personalistic-plebiscitarian leadership, can explain why.⁷¹ A conceptual opposite to the populist strategy of power personalisation through mass mobilisation comprises established organisations (not individual leaders) wielding influence through economic clout (rather than popular support) – as public IFIs or private financial corporations do. Thus, when ‘people-versus-elite’ representations incline populist leaders to challenge entrenched financial circles, a power play between fundamentally different strategies breaks loose. In this setting, the temporality of push-back from the targeted ‘elites’ and the openness of advisory systems can crucially tilt the playing field towards representational continuity or change, and thereby confrontational or cooperative decision outcomes.

Temporality of negative external feedback: Early or later ‘elite’ push-back?

Problem representations are theorised as relatively stable constructs.⁷² It often takes shocks to induce a fundamental cognitive restructuring. Most leaders will only revise core ideas – and thereby concede defeat – when their mental models are dashed by dramatic negative feedback.⁷³ Personalistic-plebiscitarian strategies of policy change – which rely on forcefully beating opposed elites – run a higher risk than mainstream governance of provoking drastic countermeasures.⁷⁴ Especially structurally vulnerable populist governments unleash financial disputes at the peril of suffering strong push-back from targeted or affected external actors.

Most forcefully, IFIs can bite back by withholding financial aid and tightening their conditionality. More common are alert signals sent by the IMF, EC, credit-rating agencies, or (if investors opt for litigation) even judicial bodies. Drastic warnings about fiscal soundness, monetary prudence, or legal compliance may catalyse capital flight in the bond and currency markets. Strong ‘elite’ push-back thus poses serious risks of leaving populist governments without affordable funds to implement their agenda, or even of catalysing socio-economic pain for the population at large.⁷⁵

There is, however, considerable variance in the temporality of those issue-specific, (partially) self-provoked external financial shocks. Attempts by Fico, Orbán, Tsipras, the M5S-Lega coalition, or Khan to deliver ‘people-versus-elite’ campaign promises have all encountered strong push-back within the first 18 months. But some decision-makers, such as Néstor Kirchner and Cristina Kirchner, can get away with defying foreign investors during opportune commodity price cycles. Huge private capital inflows also allowed Erdoğan to turn increasingly hostile towards the IMF.⁷⁶ In both cases, the day of reckoning came only after celebrating several consecutive electoral victories. This distinction matters because the ‘representation of a decision problem is not … a single, well-defined activity that can be located at a particular point in time. Representation may indeed be developed through time.’⁷⁷

When addressing an issue, decision-makers first tend to be relatively open-minded and make initial choices by trial and error. Early on, new information is sought, and even negative information accepted, to calibrate problem-solving approaches. Therefore, pragmatic representational adjustments to adverse feedback are most common in early periods of dealing with an issue.⁷⁸ But if leaders perceive no ‘shockingly’ negative reactions or even interpret feedback as confirming initial choices, they will likely conclude that their comprehension of the problem was correct. Continuing the chosen policies is increasingly seen as an opportunity. Strong negative feedback at a later period will then hit more consolidated, rigid mental models. Having experienced the validity of beliefs and committed ever more resources to implementing them, decision-makers face growing incentives to stick with or even escalate previous choices. When a representation has become an integral part of their political identity, cognitive filter mechanisms in preservation of self-esteem kick in. Later shocks could thus motivate an escalated commitment to internalised models, rather than a problem re-representation.⁷⁹

Altogether, decision-makers ‘might be relatively receptive to problem re-representation on the first few reconsiderations and then gradually increase their resistance’.⁸⁰ If a representation persists over time, it replaces new information as ‘the primary source for decisions and is used to guide decisions, even to a fault’.⁸¹ Regarding the analytical early/later distinction, the most crucial feedback for personalistic-plebiscitarian leadership is expressed via ongoing popular support, preferably at the ballot box. Populist leaders frequently invoke opinion polls or mobilise mass rallies, but electoral victories are the most unmistakable demonstration of (renewed) plebiscitary approval.⁸² The first re-election after starting to politicise a ‘people-versus-elite’ representation thus constitutes a plausible and clear-cut analytical threshold between early/later external feedback. In fact, several personalistic-plebiscitarian leaders, including Cristina Kirchner, have radicalised their populism after securing re-elections.⁸³

Importantly, the ‘later’ category applies to cases where leaders have preserved antagonistic models. Tsipras had already been re-elected in September 2015,⁸⁴ but only after fundamentally re-representing Greece’s relations with IFIs.⁸⁵ Further, the initial politicisation of an issue does not always coincide with a leader’s accession to power. Erdoğan at first pragmatically cooperated with the IMF, and only transited towards a ‘people-versus-elite’ representation after the 2007–8 financial crisis. His issue-specific ‘later’ period begins with subsequent electoral victories in the 2010s.⁸⁶ Overall, it is theorised that strong early ‘elite’ push-back should have better chances at forcing cognitive restructurings in still-fluid interpretative frameworks than later challenges to fairly rigid representations.

Critics may prioritise other questions over early/later distinctions: how much does financial push-back hurt – are the consequences an imminent socio-economic meltdown, or rather a creeping crisis? And how long does the pain last? These factors are certainly relevant, but the extent to which they are subjectively taken into account by decision-makers is crucially filtered⁸⁷ by their more or less rigidified, internalised mental models – depending on when ‘the elite’ strikes back. But how plausible is the generic expectation of initial openness to information for populist leaders in particular? One argument to mitigate this concern comes from leadership trait analysis, which does not find a less complex cognition among populist decision-makers than average leaders.⁸⁸ That said, how much negative information about strong push-back actually reaches a personalistic-plebiscitarian leader’s ear is another question, to which the discussion now turns.

Extent of negative internal feedback: Open or closed advisory system?

The impact of early/later external shocks on problem (re-)representation is amplified or suppressed by the extent to which negative internal feedback is expressed within decision circles. This makes the availability (or not) of persuasive alternative problem perspectives another key factor in producing (or preventing) representational change.⁸⁹ The anti-institutionalist bent of personalistic-plebiscitarian leadership typically translates into highly informal and centralised decision-making groups. Populism in power generally replaces institutionalised deliberation procedures with ad hoc problem-solving controlled by a predominant leader.⁹⁰ While most populist-led executives move towards low formality and high centralisation, they display more variation along a third dimension that structures leader–adviser relations: the openness of advisory systems.

Kowert argues that open advisory systems are composed of several advisers with diverse backgrounds and viewpoints, whereas closed decision-making groups consist of homogeneous circles in which similar worldviews prevail.⁹¹ With high openness, leaders tend to receive lots of differentiated information, but under low openness, they are usually supplied with limited, unanimous feedback.⁹² These ‘relative measures of openness’ are best captured by comparing staff organisation along time and across cases.⁹³ Most relevant for PFP research is distinguishing between committed populist loyalists and specialised technocratic experts. Radical anti-establishment voices should reinforce the leader’s antagonistic outlook, but centrist professionals will likely emphasise risks and counsel restraint.⁹⁴

Given that personalistic-plebiscitarian leaders ‘are generally suspicious of political elites and bureaucracy, preferring to be surrounded by loyalists’,⁹⁵ they ‘often shun advice, not to speak of criticism’.⁹⁶ But although populist staff organisation ‘tends to benefit ideological hardliners over technocratic moderates’,⁹⁷ many populist-led executives ‘have their moderates and their ultras’.⁹⁸ Such open decision-making groups, which catalyse frequent conflicts between radical populist aides and pragmatic establishment figures, can be found in parliamentary coalition governments but also in presidential systems.⁹⁹ Populist rule may thus feature a ‘surprisingly close, yet tension-filled relationship between … experts and personalistic, plebiscitarian leaders’.¹⁰⁰

Fico, Tsipras, the M5S-Lega coalition leadership, and Khan all confronted IFIs in open systems where some advisers had populist and others pragmatic profiles. Cristina Kirchner certainly championed informal centralisation but still selected aides from different ideological and professional backgrounds. In comparison, Orbán (quickly) and Erdoğan (gradually) established closed foreign economic policy decision-making groups in which loyal commitment to the populist cause trumped most technocratic credentials (for details, see supplemental material).

This paper assumes a probabilistic relationship between structural actor composition and situational agency effects. Drawing on Beasley, open populist-led advisory systems should often display factionalism, characterised by competition between adherents to combative ‘people-versus-elite’ models and advocates of cooperative ‘economic cost–benefit’ perspectives. Closed staff organisation would rather facilitate single representation embellishment dynamics, in which a homogeneous grouping of (predominantly) loyalists focuses on embellishing the leader’s ideas with supportive arguments, optimistic forecasts, and obedient implementation.¹⁰¹ As a result, populist decision-makers are more likely to fundamentally revisit ‘people-versus-elite’ interpretations if open advisory systems provide them with a technocratic reassessment of – and pragmatic solutions to – financially backfiring confrontations, rather than operating in closed echo chambers that reiterate and reinforce antagonistic representations.

While ‘leaders are often unable to regulate completely the structure of their advisory groups’,¹⁰² domestically hegemonic populists such as Orbán and Erdoğan certainly have greater control than institutionally more constrained peers.¹⁰³ Nonetheless, open/closed advisory systems should not be reduced to regime type. Bringing in two controlling cases, Hugo Chávez soon restructured his initially open foreign economic policy team to a highly homogeneous circle.¹⁰⁴ But Ecuador’s Rafael Correa, despite emulating Chávez’s march towards competitive authoritarianism, persistently favored a heterogeneous (and in consequence often conflictual) mix of technocratic and ideological advisers.¹⁰⁵ Accordingly, the open/closed distinction is best understood as a multifactor product of regime type, personal backgrounds such as military (Chávez) or academic (Correa) socialisation, and individual personality traits. Kirchner has indeed been found to express lower need for power and higher conceptual complexity than Orbán and Erdoğan, which suggests more individual concern for balanced decision-making groups and receptiveness to differentiated advice.¹⁰⁶ Finally, qualitative transitions, such as Chávez’s swift and Erdoğan’s gradual restructurings, are important, albeit relatively rare, game changers. This study ascertains the issue-specific open/closed advisory systems that were in place by the time of strong ‘elite’ push-back.

An explanatory framework of populist problem (re)-representation

This section integrates ideational and political-strategic drivers in a two-by-two matrix of cognitive mechanisms through which ‘people-versus-elite’ input is either preserved until – or discarded before – it feeds into decision outputs. Existing research on problem re-representation differentiates between strict representational continuity; marginal interpretative shifts which are least disruptive to core beliefs; and – as a measure of last resort – fundamental change in the very direction of problem-solving.¹⁰⁷ Table 2 complements these expectations with a fourth category of contingent fluidity.

Table 2. Representational continuity or change in populist decision-making.

When strong early push-back hits ‘people-versus-elite’ representations in an open advisory system, leaders are still amenable to negative feedback and provided with alternative perspectives by moderate aides. This combination is conducive to fundamental change, during which decision-makers set a new goal (usually to prevent/minimise economic damage), shift to a pragmatic identification of constraints, and adopt an overall cooperative problem category. Such comprehensive cognitive restructuring clears the way for acquiescent policy outcomes.

In combinations of early financial shocks and closed decision-making groups, leaders should be receptive to adverse external developments but are not supplied with full-fledged alternative interpretations and solutions. The decision-maker’s information search could spark limited internal factionalism, but deliberations remain dominated by single representation embellishment.¹⁰⁸ In this setting, marginal adjustments become likely, for instance by differentiating ‘between “bad” and “not-so-bad” elites’.¹⁰⁹ Leaders could adopt a more nuanced representation of constraints but should not replace the fundamental goal of implementing a preconceived ‘will of the people’. Such limited cognitive change would allow decision-makers to contemplate more flexible means but should leave their focus on antagonistic ends.

Later push-back and closed staff organisation is least likely to induce any representational change. The leader filters external information through an internalised, rigidified ‘people-versus-elite’ representation, which is bolstered by pep talks from committed loyalists. This combination most probably facilitates fundamental continuity in goal, constraint, and category, through which populist decision-makers remain laser-focused on confrontational choices.

The intersection of later shocks and open advisory systems is most difficult to predict. Opposed factions will be vying for the ear of the leader, who clings on to a long-held ‘people-versus-elite’ model. This path dependency should favour continuity, but the likelihood of representational change increases to the extent that financial pressures provide a united front of pragmatic advisers with compelling arguments to corner a faltering faction of ideologues. Situational developments ranging from the tangible consequences of ‘elite’ push-back to public opinion trends may decisively tilt the balance of adviser influence towards cooperative or confrontational voices. The resulting contingent fluidity often manifests itself in inconsistent zigzagging, with the leader’s decisions depending more on favourable/adverse situational tendencies than choices resulting from the other two-by-two intersections.

Altogether, two variables of internal/external feedback predispose populist leaders to distinct mechanisms of ‘people-versus-elite’ representational continuity or change and thereby orient their decision-making towards antagonistic or acquiescent solutions. These processes can be traced in advocated behaviour along the categories of problem goal, constraint, and category. Some analytical reasons caution against taking ‘people-versus-elite’ politicisation at face value,¹¹⁰ but for research into political choices (rather than private convictions), it is leaders’ public representations as the sum of their ideas mediated by political-strategic concerns that matter. Furthermore, if the direction of policy choices is shaped by the set of plausible options flowing from (or justified by) mental models, then problem (re-)representation should be consistent with concrete decision-making behaviour.¹¹¹ Overall, the proposed framework subscribes to arguments that research into ‘the representation of foreign policy problems’ can make ‘a constructivist ontology … compatible with positivist research’.¹¹²

Empirical analysis

This section submits the two-by-two framework to a structured, focused comparison.¹¹³ After anecdotally illustrating the frequently observed mechanism of fundamental representational change, three case studies probe how the alternative combinations of intervening factors played out in exceptional cases of prolonged populist confrontation.¹¹⁴

Cases of early push-back in an open advisory system

As sketched in the previous discussions, early shocks in open decision-making groups drove Tsipras, the M5S-Lega coalition, and Khan towards fundamental representational change, which cleared the way for (more) cooperation with IFIs. The impact of early and actively voiced negative feedback is also concisely illustrated in a leaked cable from the US Embassy in Bratislava, where Robert Fico was first elected in 2006 after campaigning on putting the interests of the ‘people’ before Slovakia’s scheduled Eurozone accession. When Fico’s assumption of office was overshadowed by massive capital flight, the technocratic ‘Central Bank governor Ivan Sramko requested an urgent meeting [and] made careful use of charts and statistics to make a strong case that Slovakia faced a severe financial crisis if the new government did not come out with a clear and unequivocal economic policy’. Fico learned and fundamentally revised his goal by committing himself to ‘do all that is necessary … for ensuring that the Euro adoption timetable is maintained’.¹¹⁵ As coordinated between domestic and external ‘elites’, Slovakia entered the Eurozone in 2009.

Viktor Orbán: Early push-back in a closed advisory system

During the global financial crisis, Hungary’s socialist government signed a two-year stand-by arrangement with the IMF, which was supplemented by EU and World Bank loans. In April 2010, Orbán celebrated an ‘electoral revolution’ to reclaim ‘economic self-rule’. His problem representation was constructed around the goal of ‘economic freedom’ by applying ‘autonomous’ pro-growth policies. Constraints to this ‘will of the people’ were, in Orbán’s politicisation, posed by the corrupt ‘Socialist elite’, austerity-imposing IFIs, and foreign-owned banks. When the incoming government imposed high ‘crisis taxes’ on the financial sector, IFIs demanded a more business-friendly approach. Orbán thus began demonising the IMF in particular as a foreign obstacle to ‘the will of the people’. Categorised as a ‘war of liberation’ for economic sovereignty, the ‘freedom fight against the IMF’ representation made continued cooperation implausible. Orbán broke off negotiations for another stand-by agreement in July 2010, declaring that Hungary would achieve economic growth on its own.¹¹⁶

Orbán was a seasoned leader, but much better prepared to pull off his master plan for domestic institutional change than for managing protracted economic problems. His government’s experimental (foreign) economic policy¹¹⁷ initially worked out because the spread between Hungarian and German bonds, which had almost reached 10 per cent in 2009, largely hovered around 5 per cent until mid-2011. Even so, ‘the IMF and various credit-rating agencies warned that Orbánomics was damaging Hungary’s credibility, undermining the confidence of investors, and threatening its ability to borrow on international markets’.¹¹⁸ This foreign admonition became a self-fulfilling prophecy in the European economic crisis of 2011. The forint exchange rate depreciated from 275 to 324 per euro in less than four months, government bonds were downgraded to ‘junk status’, and the Hungarian spread surged steadily toward 8 per cent.¹¹⁹ According to an inside observer, this push-back ‘rang the alarm bells’.¹²⁰ Financial liquidity had turned into ‘a major challenge’.¹²¹

At that time, the issue-specific ‘people-versus-elite’ representation was beyond question in a closed advisory system around Orbán and his loyal right-hand man György Matolcsy, who headed both the economy ministry and the (former) finance ministry. Nonetheless, ‘Orbán himself admitted’ that his ‘freedom fight’ had become ‘a risky undertaking’.¹²² By mid-November 2011, Orbán still said ‘if the IMF comes, I’ll go’, and Matolcsy insisted on formulating economic policies in explicit opposition to the ‘anti-popular Fund’.¹²³ But three days later, the Orbán–Matolcsy duo made a surprise move without any prior consultation within the cabinet, with the central bank, or even with the IMF itself.¹²⁴

An unexpected government communiqué associated freedom with access to financial markets and argued that in the current European crisis, ‘a new type of cooperation with the IMF … would increase our financial and economic independence’.¹²⁵ This novel argument was based on the premise that ‘we have won the first battle of our liberation struggle’,¹²⁶ but now ‘speculative swindlers are pulling the strings’.¹²⁷ The main constraint shifted from the reviled IMF to credit-rating agencies and investors conducting ‘military operations’ or ‘speculative attacks’ against the forint and government bonds.¹²⁸

Every few months, the combative Orbán–Matolcsy duo met with selected ‘government-friendly’ economists who would at most voice ‘gift wrapped’ criticism.¹²⁹ One such routine meeting had been scheduled, coincidentally, for late November. Based on insider accounts, Matolcsy voiced his antagonistic stance, while Orbán ‘wanted to understand various details … about credit ratings … speculation and about how banks work … The participants got the impression that Matolcsy and Orbán really believe in the existence of malicious financial circles and hidden speculators.’¹³⁰ Despite searching for new information, Orbán apparently remained ‘convinced that international financial circles … he offended with his economic policies are taking revenge on the country’.¹³¹ As one of the participating occasional consultants later wrote, the government ‘never had a formally approved integrated strategy’. Rather than forming ‘a joint economic chief of staff’, Orbán continued to trust in ‘a narrow circle of close advisors’.¹³²

Without a fully developed alternative representation, Orbán only reinterpreted his image of the Fund from the ‘evil IMF’ to a ‘safety net’ or ‘insurance’ provider.¹³³ While ‘speculative swindlers’ replaced the IMF as the principal barrier, the original goal of reclaiming economic self-rule remained unaltered. With access to capital markets as a crucial precondition for ‘autonomous growth policies’, the images of ‘malicious speculators’ (new key constraint) and ‘safety net/insurance provider’ (the IMF’s reinterpreted role) both chimed in with the initial ‘will of the people’.¹³⁴ Combining the same goal with an adjusted external barrier resulted in a more defensive yet defiant as ever problem categorisation of ‘protecting our freedom against speculative attacks’.¹³⁵

Guided by this model, Orbán and Matolcsy generated the option of negotiating a precautionary IMF credit line without regular external monitoring.¹³⁶ To preserve ‘economic sovereignty’, any substantive policy concessions remained off the table.¹³⁷ But the IMF (and EC) insisted on only discussing a stand-by arrangement with reforms and regular revisions. A few isolated ‘negotiations about negotiations’ between December 2011 and July 2012 never overcame the sticking point of external policy prescriptions. The Hungarian representatives lacked flexibility as Orbán continued to trust in Matolcsy’s hard-line advice.¹³⁸ Through these lenses, ‘compliance with the IMF or the EU [was still] perceived as one of the worst political-economic choices’.¹³⁹

Eventually, the Orbán-led government remained ‘at the brink of default’ for several months, accompanied by ‘a historical low’ in the level of investments.¹⁴⁰ An economic ‘contraction of 1.7 percent in 2012 and a stagnation in 2013 [were] a long way from the governmental dreams of a turn to robust growth’.¹⁴¹ However, after weathering undersubscribed and even cancelled bond auctions in early 2012, Hungary’s spread gradually decreased back to 5 per cent. Orbán’s problem representation thus returned to square one, replacing the ‘speculative attacks’ barrier with the initial ‘evil IMF’ image. In October 2012, the government proclaimed in full-page newspaper advertisements that ‘we will not give in to the IMF!’ and soon afterwards terminated the negotiations about negotiations (see Table 3). By August 2013, new taxes had been levied on banks, all debt to the IMF was repaid, and its resident representative left Hungary.¹⁴²

Table 3. Viktor Orbán: Hungary’s relations with the IMF.

Cristina Kirchner: Later push-back in an open advisory system

Following Argentina’s traumatic 2001–2 sovereign default, the presidential couple Néstor Kirchner (2003–7) and Cristina Kirchner (2007–15) staked its political fortunes on defending ‘the people’ against further hardship inflicted by ‘neo-liberal elites’. Until 2010, 93 per cent of defaulted obligations were restructured in harsh debt swaps. Most lenders around the globe became exchange bondholders by accepting new securities with a nominal value of 35 cents on the dollar. Among the hold-out creditors, some mostly foreign distressed-debt investors or ‘vulture funds’ litigated for a full repayment before the New York District Court. For a decade, Cristina Kirchner made the goal of debt relief her top priority. She identified the group of ‘greedy vulture funds’ – who by definition would never waive a signficant part of their claims – as an obstacle to be isolated and cold-shouldered. Categorising the problem of litigant holdouts in terms of defiance, any negotiations became senseless. The options pursued over the years ranged from proclaiming that Argentina would pay ‘not even one dollar’ to offering at most another debt swap (i.e., a nominal payment of 35 per cent) and playing for time.¹⁴³

The ‘resistance against greedy vultures’ representation provided viable solutions as long as booming commodity prices allowed successive Kirchner governments to promote growth without courting international capital.¹⁴⁴ But after Cristina Kirchner’s re-election in 2011, Argentina entered a period of economic stagnation as well as growing fiscal and current account deficits. With continued risk penalties at capital markets and deteriorating terms of trade since 2013, forex reserves declined from over 50 billion dollars in 2011 to under 30 billion by early 2014. A long-resisted massive peso devaluation in January 2014 was followed by an inflationary spike towards levels of 40 per cent.¹⁴⁵

The hold-out litigation before US courts, which the Financial Times dubbed the ‘sovereign debt trial of the century’, culminated in the definite verdict on 16 June 2014. Argentina was ordered to pay distressed-debt funds in full before making the next scheduled interest payment to exchange bondholders – which was to fall due on 30 June. Kirchner thus had to choose between paying litigant hold-outs or defaulting on restructured debt. This harsh ‘elite’ push-back made sense in the leader’s internalised populist model but pushed the usually divided aides in her open foreign economic policy advisory system to finally speak with one voice.¹⁴⁶

Kirchner’s four main advisers interpreted the imminent risk of another default by drawing analogies with Argentina’s 2001–2 financial chaos and socio-economic breakdown. One close confidant allegedly argued that ‘we can’t squander everything now and leave things like they were in 2001’.¹⁴⁷ Even Economy Minister Axel Kicillof, who usually represented the hard-line wing,¹⁴⁸ reportedly raised a pivotal question: ‘How could the government that resolved the default go back into default?’¹⁴⁹ Heeding this unanimous advice, Kirchner fundamentally revisited her representation. In intense deliberations, she set the new goal of avoiding another default and accepted the constraint posed by the judicial verdict. As the government depended on judicial authorisation to continue paying exchange bondholders, Kirchner relocated the problem in the category of conflict settlement negotiations. Multiple press reports agree that she asked her aides to elaborate options for a payment agreement.¹⁵⁰ In a speech on 30 June, Kirchner no longer referred to ‘vultures’, asked the judge for ‘just negotiation conditions’, and repeatedly declared Argentina’s willingness to find a solution for all creditors.¹⁵¹

On 30 June, the New York District Court ruling prevented exchange bondholders from receiving the interest payments that Argentina had deposited with its US-based payment agent. This credit event triggered a 30-day grace period to avoid a formal default.¹⁵² On 7 July, Kicillof had a relatively constructive meeting with Dan Pollack, a judicially appointed special master, in New York.¹⁵³ Accordingly, observable manifestations of Kirchner’s ‘conflict settlement negotiations’ re-representation can be found in private deliberations, publically advocated behaviour, and concrete steps towards conflict resolution.

While the time to avoid another default was running out, the next three weeks also brought some positive news: first, Argentine authorities secured up to 11 billion dollars in short-term loans from China. Second, unlike the initial fears of Kirchner’s advisory team, Argentina’s risk premium and the informal peso exchange rate remained in a less alarming state than in early 2014. Third, popular support for defying ‘the vultures’ was increasing. These favourable developments can explain why Kirchner’s cognitive restructuring remained fluid, rather than sustainably replacing her internalised defiant model. The three most experienced advisers continued to advocate conflict settlement negotiations, but Kicillof spotted the opportunity of reconciling Kirchner’s pragmatic goal of avoiding a disastrous default with her years-long defiant representation. Kirchner and Kicillof thus developed a joint third problem understanding. The moderate faction promoted cooperative options until late July, but the Kirchner–Kicillof duo deemed those solutions no longer plausible, cancelled them at the last minute, and rejected the inevitable default ratings as ‘nonsense’.¹⁵⁴ Pollack later attributed the failure of possible conflict resolutions to ‘a significant change’ in Kirchner’s and Kicillof’s attitude.¹⁵⁵

Reflecting her combined goals, Kirchner emphasised that ‘the world keeps turning, and Argentina, too’ (i.e., no economic crisis), but offering more than in previous debt swaps would ‘be paid as in the 90s with the hunger of the people and … a new genocide imposed on the Argentine people’.¹⁵⁶ This reloaded populist re-representation embedded the constraint of attacks ‘from internal and external vultures’¹⁵⁷ in the problem category of a ‘great battle … against international financial capital’.¹⁵⁸

Argentina thus ‘found itself returning to a debt crisis, with the 2001 episode having never been fully resolved’.¹⁵⁹ The technical default triggered little socio-economic pain but probably exacerbated Argentina’s stagflation and deteriorating social indicators in 2014.¹⁶⁰ Central Bank Governor Vanoli describes the second half of 2014 as ‘the most complex of circumstances’, caused by the judicial ‘blockade and the boycott of those who did not bring in foreign currency’.¹⁶¹ Despite these pressures, the ‘fight against the international financial system’ representation foreclosed any significant concessions in the last 18 months of Kirchner’s presidency (see Table 4). The leader’s reinforced defiance became ‘the centerpiece’ of her political identity ‘as the defender of national interests against predatory attacks from foreign investors’.¹⁶²

Table 4. Cristina Kirchner: Argentina’s relations with distressed-debt funds.

Recep Tayyip Erdoğan: Later push-back in a closed advisory system

Erdoğan’s advocated and actual behaviour vis-à-vis the IMF epitomises his trajectory in office. In the wake of Turkey’s 2001–2 socio-economic crisis, the open advisory system around the incoming anti-establishment leader faced ‘economic blackmail’ from IFIs and ‘quickly learned that butting heads with the IMF … was damaging to its credibility with business and financial circles’.¹⁶³ Unsurprisingly, Erdoğan pragmatically followed an inherited reform drive that attracted significant foreign investment and catalysed impressive economic growth. But after the global financial crisis, Erdoğan identified the IMF as a constraint to his increasingly assertive goal of ‘economic sovereignty’. The corresponding ‘make Turkey great again’ category received plebiscitary acclamation in consecutive electoral victories, becoming well entrenched in Erdoğan’s mind and his ever more closed advisory system.¹⁶⁴

In 2018, Erdoğan spooked investors with idiosyncratic beliefs about monetary policy, and by bringing Turkey’s financial institutions fully under his individual control. The Turkish lira crashed from July to August 2018, followed by another currency crisis in 2020. This strong investor push-back went hand in hand with external IMF admonition as well as domestic debates in which the Fund emerged as the most prominent option for bringing back stability. Overall, the lira lost 80 per cent in value against the dollar in five years, and skyrocketing inflation touched a 24-year high of 85.5 per cent in October 2022. Government finances remained relatively robust thanks to a low debt-to-GDP ratio and because dried-up Western capital inflow could be compensated with financing from Eastern partners – but millions of Turkish citizens have returned to poverty.¹⁶⁵

Erdoğan resisted the disturbing feedback by escalating his commitment to a thoroughly internalised anti-IMF model. Zeroing in on the goal of preserving Turkey’s ‘economic sovereignty’, any obstacles were caused by greedy financial circles, including the IMF, and ‘economic terrorists’.¹⁶⁶ The expressed image of the Fund became more negative than ever before, with Erdoğan literally referring to ‘the evil of IMF’.¹⁶⁷ His reinforced populist representation was placed in the category of ‘being in a liberation war against imperialist Western powers, crusaders, and global financial lobbies’.¹⁶⁸

The only plausible options flowing from the ‘liberation war’ model were continuing autonomous policies. Policymakers around Erdoğan could ‘not even consider a possible IMF deal’¹⁶⁹ and ‘appeared to be single-minded in their commitment to … never again “put Turkey under the IMF yoke”’.¹⁷⁰ One local observer summarised how most advisers reinforced Erdoğan’s representation: ‘Bang your fist on the table, make the decision, and the market will go with us.’¹⁷¹ For an entire presidential stint, Erdoğan insisted on self-defeating monetary policies without IMF cooperation – and got away with another re-election victory in May 2023 (see Table 5).

Table 5. Recep Tayyip Erdoğan: Turkey’s relations with the IMF.

Comparative discussion

Neither Orbán, Kirchner, nor Erdoğan had an easy ride in defying external shocks, but all ultimately implemented their preconceived ‘will of the people’. When early push-back challenged Orbán’s still-flexible problem representation, the limited negative feedback in his closed advisory system prevented him from performing a similarly fundamental change as did Fico, Tsipras, the Lega-M5S coalition, or Khan. Instead, Orbán did not step beyond marginal adjustments and muddled through a year of constrained liquidity and recession, before completing his anti-IMF agenda.

Facing a later shock in an open system, Kirchner was internally supplied with compelling alternative arguments and seemed to pragmatically accept a fundamental reinterpretation. But her contingent fluidity became apparent as soon as more opportune developments emboldened a hardcore adviser and stymied the cooperative faction,¹⁷² which facilitated a rapid return to the long-held populist model. Kirchner’s choice to leave the ‘vulture’ problem for a successor, made after a few critical weeks with diffuse knock-on effects, was certainly less costly than Erdoğan’s unyielding defiance in a five-year period of currency shocks, runaway inflation, and growing poverty. The single representation embellishment dynamics of closed staff organisation explain why his rigidified populist representation displayed fundamental continuity despite perennial pain for ‘the people’.

The procedural observations in three cases of ideational ‘people-versus-elite’ driving forces and similarly antagonistic outcomes conform to the expected patterns of representational continuity or change. Distinct combinations of early/later push-back and open/closed advisory systems explain Orbán’s subtle differentiation between more or less ‘evil’ financial actors, Kirchner’s zigzagging towards defiance, and Erdoğan’s headstrong populist purity. Accordingly, there are different cognitive mechanisms through which ‘people-versus-elite’ input may ultimately feed into confrontational decision-making output.

This leads to some qualifying caveats. For starters, the marginal adjustments and especially fundamental continuity mechanisms most probably lead to defiant outcomes (because decision-makers preserve antagonistic goals), but contingent fluidity processes remain open-ended. While Orbán took significant risks and the population under Erdoğan paid substantial cost to ‘beat the elite’, Kirchner was lucky enough to find some opportunity amid the adversity of being forced to choose between paying or defaulting. As a controlling case from another field of foreign economic policy, the contingent fluidity of later push-back in an open advisory system ended less favourably for Rafael Correa’s politicised anti–free trade agenda. When the European Commission coerced his government into signing a long-resisted free trade agreement (FTA), the structural and regulatory sources of strong ‘elite’ pressure (2013–14) were bound to stay, and public opinion in Ecuador was not necessarily against FTAs. Eventually, a pragmatic faction emerged victorious from intense governmental in-fighting, and after contradictory re-representations, Correa approved the agreement.¹⁷³ Comparing the cases of Kirchner and Correa suggests that, when later push-back meets open advisory systems, sustained populist defiance remains at the mercy of situational contingencies.

As an important scope condition, the introduced two-by-two matrix applies to the populist strategy of personalistic-plebiscitarian leadership¹⁷⁴ rather than any type of rule. Mainstream leaders are, of course, not (or much less) driven by ‘people-versus-elite’ ideas, and therefore less likely to antagonise powerful economic actors in the first place. And as long as mavericks such as Britain’s Liz Truss remain party functionaries, rather than personalistic-plebiscitarian leaders, they can be quickly reined in or removed by their own parties, instead of riding out ‘elite’ push-back with marginal adjustments.¹⁷⁵ This cognitive mechanism pertains specifically to populist decision-makers like Orbán or, as another example, Chávez in the (domestically) fiercely contested first years of his ‘oil sovereignty’ campaign (2001–3).¹⁷⁶

Finally, even prolonged populist defiance may not last indefinitely. After Orbán or Chávez resisted strong ‘elite’ push-back for several months, the pressures eased mostly due to improving conditions in the capital or commodity markets. But Erdoğan’s self-inflicted financial turmoil persisted throughout his fundamentally continued five-year anti-IMF struggle. In this deadlock, the positive feedback from Turkey’s 2023 elections offered Erdoğan an opportunity to reopen his advisory system by bringing more orthodox finance professionals in, who have since initiated an ‘IMF-style’ stabilisation programme. Thus, re-election victories without suffering economic pain should reinforce ‘people-versus-elite’ representations (e.g. Kirchner 2011, Erdoğan 2011, 2014, 2018), but a personalistic-plebiscitarian leader’s re-election after enduring socio-economic troubles may have a different logic. Billings and Hermann indeed qualify that decision-makers with internalised representations will, after a considerable time of adversity (in which all plausible options are exhausted), eventually become more willing to search for alternative understandings.¹⁷⁷ Perpetual representational continuity despite compounding socio-economic pain ultimately requires systematic domestic repression. This option, however, implies marching from (competitive authoritarian) personalistic-plebiscitarian leadership (e.g. Erdoğan) towards coercive dictatorship (e.g. Chávez’s successor Nicolás Maduro),¹⁷⁸ which is beyond the scope (condition) of this paper.

Conclusion

How did Orbán, Kirchner, and Erdoğan, unlike most populist leaders, manage to defy pressures from IFIs, distressed-debt funds, foreign courts, or capital markets for prolonged periods? The paper tackles this question at the intersection of FPA and IPE by integrating the problem representation literature with ideational and political-strategic approaches to populism. The time of early/later adverse external feedback and the extent of negative internal feedback in open/closed advisory systems are proposed as two intervening variables for explaining populist decision-makers’ representational continuity or change. This parsimonious two-by-two framework plausibly elucidates distinct cognitive mechanisms of marginal adjustments, contingent fluidity, and fundamental continuity through which Orbán, Kirchner, and Erdoğan pushed through their preconceived ‘will of the people’. Thus, the few populist leaders who defied financial pressures for prolonged periods accomplished their feat in different ways.

Overall, public IFIs or private investors have the best chances to compel representational change early on, provided that populist challengers (still) operate in heterogeneous decision-making groups. Later ‘elite’ push-back will have to strive against more rigid ‘people-versus-elite’ representations, especially if external pressures are dampened by the selective internal feedback of closed advisory systems. Moreover, Orbán’s readjusted, Kirchner’s recovered, and Erdoğan’s ratcheted-up final populist representations were at least as radical as their initial ‘people-versus-elite’ models. This suggests that bearing financial shocks one way or the other makes populists ever more committed to ‘beating the elite’.

Future PFP research will benefit from taking the temporality of external push-back and the openness of advisory systems into account. This implies not only studying IR at the domestic–foreign nexus, but also nuancing constructivist or liberal institutionalist arguments. Temporal variation in cognitive sensitivity to externally induced belief change, as well as interpersonal leader–adviser agency within domestic institutional settings, matters to unbox how decision-making processes translate material, ideational, and institutional factors into policy outcomes.¹⁷⁹

The generalisability of the introduced analytical framework requires further cross-regional scrutiny in IPE topics beyond finance and other IR areas including security, diplomacy, or regional integration. Future IPE research could also systematically compare the strategies, success, and sustainability with which several reined-in populist leaders, but also their more recalcitrant peers from Hungary, Argentina, and Turkey, have tried to escape dependence on Western capital and IFIs by (sooner or later) approaching China, Russia, and/or other Eastern partners.¹⁸⁰ FPA scholars, in turn, could relate analytical temporal distinctions between early/later conflict periods to observations of populist decision-makers’ individual timing agency.¹⁸¹ What matters in the end is the leader’s understanding that the time has come to beat the elite or concede defeat.