In 2016, both Brexit and Trump took the markets by surprise. Will the so-called “rise of populism” continue into 2017? Its first significant electoral test is the Dutch general election tomorrow, with all eyes on Geert Wilders.
A “win” for his populist Freedom Party is securing the most votes and occupying the most seats in the Netherlands’ equivalent to the House of Commons, the 150-member Lower House (Tweede Kamer, literally “Second Chamber”). The Dutch system of proportional representation means that no party has ever won an overall majority. The closest was 54 of the 150 seats won by the Christian Democrats in 1989.
Both the Freedom Party and the ruling People’s Party are neck and neck, with each forecast to win between 20 and 30 seats, but momentum at the close of the campaign is said to be with Prime Minister Mark Rutte.
But if Wilders manages to pip him to the post, even if he doesn’t manage to form a coalition government (as is likely), he will occupy an important bully pulpit to make life for the next government extremely uncomfortable.
Whatever the result, the next government is likely to be unstable due to an overall shift in votes (and therefore seats) from the biggest few parties to their smaller competitors. A recent projection of seats by Tom Louwerse of the University of Leiden indicates that at least four parties will be required to form a coalition (the current government is a coalition between two).
But because all the major parties have ruled out joining with the Freedom Party, only one possible combination of four remains. And that would involve the left-wing Greens and the right-wing People’s Party. Many combinations of five parties are possible, but only one does not involve the People’s Party, who the hard-left Socialists have ruled out governing with.
When the new coalition is agreed, it’s therefore likely to include the ruling People’s Party. But don’t expect an announcement by Friday. In 2012, the process took nine weeks and in 1977 it took an incredible seven months.
Much of the commentary around the Dutch election points to the similarities between Brexit, Trump and Wilders. It would be a mistake to assume, however, that anyone who was pro-Brexit is automatically pro-Trump, pro-Wilders or pro other countries leaving the EU.
As Vote Leave’s chief executive, much of my time was spent battling Ukip, Nigel Farage and Arron Banks’s Leave.eu campaign – the closest equivalents to the Freedom Party in the UK.
But while there are very clear distinctions, there are also some important similarities between recent changes to public opinion in the Netherlands, the UK and the US. I explore some of these in my new paper for the Legatum Institute on the Dutch election.
One key driver in the Dutch election is likely to be concerns about unemployment, for example. In this regard, the Netherlands fell from fifth place in 2011 to nineteenth in 2014 in an OECD ranking of 28 advanced economies, highlighting an alarming decline in employment relative to similar countries.
The impact of unemployment is always felt most by people at the margins. It is telling, therefore, that the Gallup World Poll shows that the fraction of Dutch people in the bottom income quintile who agree that corruption in government is widespread ballooned from 24 per cent in 2011 to 59 per cent last year.
These are the kind of voters who were crucial to Leave’s victory in the EU referendum, so it will be interesting to see whether their concerns about unemployment and their pessimism about corruption in the Netherlands translate into greater support for populist parties, including the Freedom Party.
Populist parties of both the right and left will undoubtedly hold more seats once the votes are counted, and Wilders will emerge from the election in a stronger position. The question is whether mainstream parties have done enough to respond to the legitimate concerns of voters, or whether they are in for a similar shock to that experienced by Remain campaigners and Clinton supporters in 2016.