Business Factions, Populists, and the Social Bloc Perspective: The Case of FDI-led Growth Regimes

How do growth regimes characteristics constrain the choices of populists regarding their relations with business? What business factions are likely to uphold, and respectively oppose, the national-populist turn in the neoliberal policy regime of foreign direct investments (FDI)-led growth regimes? To answer these questions, this chapter focuses on the organizational linkage between populists and business via changes in the dominant social bloc of the dominant growth regime. By examining the case of resilient (Hungary) and fleeting (Romania) populist projects, the empirical analysis makes three claims. First, while populists in FDI-led growth regimes can challenge crisis-ridden multinational financial capital due to its secondary relevance to the growth regime, they are better off politically when they do not challenge the structural power of multinational industrial capital. Indeed, in contrast to Romania, multinational industrial business was an essential social bloc ingredient in Hungary, bolstering its resilience. Second, since attacks against foreign financial institutions comes with sovereign bond risk, the fate of the attack hinges on having institutional capabilities such as a central bank ready to credibly monetize debt and a revenue agency with an enforceable commitment to adequate tax collection. Third, the chapter reaffirms the centrality of the medium and petite bourgeoisie for the populist project, thus challenging the claim the interest of the SME sector is to be opposed to populism. However, the case of Romania shows that under certain conditions the populists may lose the support of the domestic SME sector, thus cracking the populist social bloc.