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 * Democracy erosion leads to economic decline. Here are the 7 highest risk
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Business


DEMOCRACY EROSION LEADS TO ECONOMIC DECLINE. HERE ARE THE 7 HIGHEST RISK
BUSINESS TYPES.

By Becca Roberts Last updated May 14, 2024
Share


“ECONOMISTS HAVE FOUND THAT COUNTRIES WITH RIGHT-WING OR LEFT-WING POPULIST
LEADERS SEE A 10 PERCENT DECLINE IN GDP PER CAPITA IN THE FIRST 15 YEARS.”



With the decline of democracy, almost all companies will therefore face
significant costs. But certain sectors and industries face particularly high
risks given the erosion of democracy. Interventions in many of these areas have
already occurred in the United States.

 1. Companies with high influence on government decisions: Companies that rely
    on government contracts or licenses or are subject to audits or regulatory
    control are particularly easy targets for would-be autocrats. For example,
    Viktor Orban used a license renewal process to pressure Hungary's leading
    telecommunications company to shut down one of Hungary's best-known
    independent news sites.
 2. Companies that rely on public investment or public services: Companies that
    use government data may find the data less reliable if accurate data is
    viewed as harmful to the party in power. In India, interference with the
    publication of economic data led to the chairs of the National Statistics
    Commission resigning in protest. Companies that use public services may face
    discrimination in accessing these goods or a loss of quality due to
    disinvestment.
 3. Companies that invest over a longer time horizon: Because of the political
    instability that often accompanies the erosion of democracy, companies that
    need to make long-term investments—for example, companies that make
    difficult-to-move capital investments—are particularly at risk.
 4. Companies that rely on well-trained workers: The brain drain is already a
    problem in many countries. Younger workers with high human capital tend to
    move to places with a good supply of public goods and take the political
    environment into account when looking for work.
 5. Media, entertainment and communications companies: Controlling public
    discourse is a key strategy for political leaders seeking to expand their
    power, and therefore would-be autocrats typically seek to dominate companies
    in the media, entertainment and communications sectors, including both media
    content producers and media owners Channels and systems. In 2021,
    then-President Jair Bolsonaro in Brazil attempted to block social media
    companies from removing content that violated their rules.
 6. Companies from science, medicine and education: Facts can threaten an
    autocratic regime by either exposing government failures or undermining the
    regime's self-justifying myth. Companies in the scientific, medical and
    educational sectors are therefore likely to face a high level of scrutiny
    and control efforts. For example, in the one-party “Jim Crow” state in the
    South, leaders refused to collect data on the incidence of pellagra, a
    malnutrition disease, because such data would reveal the extent of poverty
    in the South.
 7. Private companies and companies in tourism. Businesses that rely on
    customers to show up in person may suffer a loss in profits if there is
    political or ethnic violence in an area. The chilling effect can affect
    entire neighborhoods, cities, and even states as potential customers avoid
    places known for human rights violations, political instability, or
    political violence.

Unfortunately, there is no guarantee that business leaders will recognize their
economic interest in maintaining democratic functioning. In the past, business
leaders have often tragically misjudged the risks of supporting authoritarian
regimes. Business can play a critical role in protecting democratic functioning;
Recognizing the dangers of democratic decline is a crucial first step.



author


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RISING MARKET POWER OF TECHNOLOGY INCREASES INEQUALITY AND DESTROYS DEMOCRACY

High levels of inequality have torn the fabric of American society and weakened
its democracy. The most extreme form is the large number of billionaires in
America and the extraordinary compensation of CEOs. In 2020 Elon Musk's
compensation was $6.7 billion and Mike Pykosz, the CEO of Oak Street Health,…

February 23, 2023

In "Technology"

US VOTING RIGHTS | VOICE OF AMERICA

Host Carol Castiel and assistant producer at the Current Affairs Desk, Sydney
Sherry, talk with Eliza Sweren-Becker, counsel in the Democracy Program at the
Brennan Center for Justice, about the impact of the wave of restrictive voting
laws emanating from mostly Republican state legislatures. Sweren-Becker also
discusses the implications of…

July 9, 2021

In "News"

EXPERTS EXPLORE TECHNOLOGY’S POTENTIAL TO BOLSTER DEMOCRACY, EDUCATION

array array array array array array array array array array array array array
[Chinese multinational technology companies] array array array array array array
array array array array array array array array array array

April 19, 2022

In "Technology"

Share
Becca Roberts 30600 posts 0 comments



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