Macroeconomics, Policies, and Hungary: how an illiberal democratic government characterized by populist rhetoric deals with a crisis and economic choices

We know that populism and authoritarianism are caused by both economic and cultural components. However, what happens when an authoritarian and populist leader is in power? Does he or she focuses on real economic problems, or does he or she mainly focus on discourse manipulation? In other words, is this a political and economic system sustainable in the long run or to deal with a crisis? This work focuses on this underrated aspect of the literature by bringing together populist discourse as an independent variable, public finances as an intervening variable, and economic stability as a dependent one. To do so this work focuses on Hungary, as it is a country that has been administered by a government characterized by populist characteristics for more than ten years. In practice, this work will first apply the 2007 economic diagnostic framework of Rodrik to analyse if the reasons behind the populist rhetoric match the economic diagnostic of the country. It will then analyse the composition of the public budget and spending of Hungary, to understand if the current economic situation is sustainable or not. This paper will analyze how institutional disconnection between politics and the economy works by using different descriptive statistics. It will use the macroeconomic data available at the World Bank database and at the Hungarian Central Statistical Office.