Political Entrepreneurs: The Rise of Challenger Parties in Europe

POLITICAL ENTREPRENEURS

Political Entrepreneurs

The Rise of Challenger Parties in Europe

Catherine E. De Vries and Sara B. Hobolt

PRINCETON UNIVERSITY PRESS

PRINCETON AND OXFORD

Copyright © 2020 by Princeton University Press

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Printed in the United States of America

10 9 8 7 6 5 4 3 2 1

To Mila, Noah, Elliot, and Alexander

CONTENTS

Preface  xi

Introduction  1

The Argument in Brief  5

Dominant and Challenger Parties  7

Plan of the Book  10

PART I. POLITICAL CHANGE IN EUROPE

1      The Rise of Challenger Parties  15

Who Are the Challengers?  17

Waves of Challenger Parties  23

The Rise of Challenger Parties  33

Conclusion  38

2      A Theory of Political Change  40

Patterns of Party Competition in Western Europe  43

Political Change: Between Dominance and Innovation  46

Sources of Market Dominance  49

Innovation of Political Entrepreneurs  53

The Potential for Political Transformation  57

Conclusion  58

PART II. DOMINANCE

3      Voter Loyalty  63

Barriers to Entry for Challenger Parties  66

Shrinking Party Membership  71

The Decline of Party Identification  74

The Rise of Electoral Volatility  76

The Barriers to Entry in Denmark and the United Kingdom  80

Conclusion  84

4      Strategies of Dominance  86

Distinctive Convergence  90

Issue Avoidance  97

Competence  101

Conclusion  108

PART III. INNOVATION

5      Issue Entrepreneurship  113

Issue Entrepreneurship  115

The Importance of Appropriability  119

Examining Issue Entrepreneurship  120

The Issue Entrepreneurship of Challenger Parties  124

Case Studies of Issue Entrepreneurship  130

Conclusion  139

6      Antiestablishment Rhetoric  141

The Nature of Antiestablishment Rhetoric  145

Who Employs Antiestablishment Rhetoric?  149

Measuring Antiestablishment Rhetoric  152

The Antiestablishment Rhetoric of Challenger Parties  156

A Case Study of Antiestablishment Rhetoric  172

Conclusion  175

PART IV. TRANSFORMATION

7      Changing Voter Appeal  181

Voter Appeal  183

The Electoral Effects of Innovation  188

Conclusion  202

8      Representation and Government  204

Representation  207

The Mobilizing Effect of the Alternative for Germany  214

Government  220

Government Formation in Belgium  226

A Fragile Government in the Netherlands  229

Conclusion  232

9      Future Scenarios  234

Principles of Political Change  237

Future Scenarios for Political Change  243

Questions for Future Research  252

Notes  257

Bibliography  281

Index  309

PREFACE

This book is the result of a long conversation between two colleagues and friends. It is the outcome of our personal experiences with as well as our research on political change in Western Europe. This conversation started about 16 years ago when we were both completing our doctoral research on ruptures in European politics. We met at a conference held at the Johns Hopkins University School of Advanced International Studies in Bologna, Italy. Born Danish and Dutch, we were perhaps not as taken aback as others by the rise of the populist far right in Europe. We were familiar with the successful political entrepreneurship of Mogens Glistrup, founder of the Progress Party in Denmark, and Pim Fortuyn, founder of the List Pim Fortuyn in the Netherlands. The permissive electoral rules in Denmark and the Netherlands had allowed electoral breakthrough of such challenger parties long before they succeeded elsewhere. At the same time, a comparison of our Danish and Dutch experiences presented us with an interesting puzzle about the timing of political change. The landslide election that shook up the political mainstream in Denmark occurred in the early 1970s, whereas Dutch mainstream parties remained resilient for much longer. This raised questions about why the pace and nature of political change were so different in countries otherwise so similar.

In our search for answers, we both noted an apparent schism between the scholarship on political parties and political change in Europe and that in the United States. Each of us had spent time at an American university, the University of North Carolina at Chapel Hill and the University of Michigan, and we were struck by the differences between how Americanists and Europeanists would explain political change. As students of politics in Europe, we were well-versed in sociological theories of political parties as expressions of societal divisions rooted in big historical divides. Yet, our exposure to scholarship on American politics presented us with another, equally compelling, image of political parties as an organizational vehicle for the strategic interests and actions of political elites. Our intellectual journey to understand political change, which is documented in this book, started with Seymour Martin Lipset and Stein Rokkan and their cleavage theory, and was enriched by classic books on American politics, such as The Semisovereign People by Elmer Schattschneider, Liberalism against Populism by William Riker, Why Parties? by John Aldrich, and Issue Evolution by Edward Carmines and James Stimson. Our theory of political change that is at the heart of this book fuses insights from the pathbreaking work on party competition in both Europe and the United States.

As such, this book is inspired by the work of incredible scholars of European politics, including James Adams, Lawrence Ezrow, Mark Franklin, Liesbet Hooghe, Ronald Inglehart, Orit Kedar, Herbert Kitschelt, Hanspeter Kriesi, Peter Mair, Gary Marks, Bonnie Meguid, Cas Mudde, Pippa Norris, and Robert Rohrschneider (and many others), as well as the seminal work on American politics by John Aldrich, Edward Carmines, Tom Carsey, Robert Erikson, Michael MacKuen, William Riker, Elmer Schattschneider, James Stimson, and many others. Another critical source of inspiration has been the work on political parties and electoral politics in developing democracies by scholars like Kevin Deegan-Krause, Tim Haughton, Noam Lupu, Beatriz Magaloni, and Joshua Tucker (and many others). This book is the result of us being able to stand on the shoulders of these intellectual giants, many of whom we had the pleasure of exchanging our ideas with in person.

Our own ideas have developed over a number of years. They build on our previous work on challenger parties and issue entrepreneurship that was published in European Union Politics in 2012, the European Journal of Political Research and the Journal of Politics in 2014, and Comparative Political Studies in 2015. We wish to thank our coauthors on two of these articles, Jae-Jae Spoon and Marc van der Wardt, for their important contributions to our thinking. We are also grateful to Julian Hörner and Mariken van der Velden, who worked with us on the research presented in chapters 6 and 8, respectively. Originally, we set out to write a book about just challenger parties, but we soon realized that the story of postwar European politics is just as much about the resilience of mainstream parties as it is about the rise of challengers.

In this book, we wish to tell a story of European party politics that is not simply focused on the last decade of turmoil, but that can help us understand decades of both stability and change in party systems across Europe. We adopt a long-term and comparative perspective to explain the nature of political change in Europe, combining quantitative evidence with qualitative case studies. The book is designed to be accessible to a broader audience of readers interested in understanding the changes in politics that we have been observing over the past decades. This more accessible format has presented us with some difficult choices, however. The book relies heavily on descriptive inference using observational data and case studies, rather than on causal inference and experiments. This is not because we think that causal identification is not important, but because the questions this book aims to cover often do not lend themselves to more narrowly focused causal inference research designs. In our view, the ability to causally identify political phenomena should not limit the questions we aim to address as political scientists.

Our analyses of long-term and cross-national patterns of political change and stability in Europe have been possible only because of the vital data collection efforts of teams of scholars over many decades. The analysis presented here relies on data from the Chapel Hill Expert Survey (CHES), the Comparative Study of Electoral Systems (CSES), the European Election Studies (EES), the Manifesto Project Database (MARPOR/CMP), ParlGov, and national election studies, among other data sources. These collaborative data collection projects provide an invaluable public good for scholars of European politics, and we are grateful to all the individuals who have contributed to them. We are also very fortunate to have worked with some amazing research assistants: Philipp Dreyer, whose help with data collection and data analysis has been invaluable, as well as Diane Bolet, Julian Hörner, Pia Nagl, Pit Rieger, and the many coders of antiestablishment rhetoric at the Vrije Universiteit Amsterdam, who all performed excellent work. We are grateful for the generous funding by the European Research Council (ERC GA 647835, EUDEMOS, PI: Sara Hobolt) and a VU Interdisciplinary Centre for European Studies (VICES) research grant (PI: Catherine De Vries), which gave us the necessary time and resources to work on this ambitious project.

This book has not been just a conversation between us as coauthors. We have been fortunate to have been accompanied by many wonderful and insightful colleagues and friends along the way. Over the years, we have shared and discussed our ideas with many colleagues in different settings, from conference presentations to talks to informal conversations over coffee. We are not able to mention them all by name, but we are grateful to everyone who has engaged with our ideas. We owe very special thanks to our colleagues Tarik Abou-Chadi, Lawrence Ezrow, Simon Hix, Robert Klemmensen, Toni Rodon, Petra Schleiter, Moritz Osnabrügge, and Julian Hörner, who all attended a book workshop at the London School of Economics and Political Science (LSE) in January 2019. They provided invaluable input on our book manuscript. Drafts of chapters were presented at faculty seminars, workshops, and conferences. Specifically, we thank the hosts and attendees at the LSE, University of Cologne, University of Essex, University of Konstanz, University of Mannheim, University of North Carolina at Chapel Hill, University of Oxford, University of Texas at Austin, Vrije Universiteit Amsterdam, WZB Berlin Social Science Center, and at panels during the meetings of the American Political Science Association, the European Political Science Association, the European Union Studies Association, and the Midwest Political Science Association. Their constructive comments have helped us to improve our arguments and evidence. At these conferences and workshops, we are grateful to have received valuable input from Ryan Bakker, Daniel Bischof, Lisanne de Blok, Bruno Castanho Silva, Russ Dalton, Elias Dinas, Jeremy Ferwerda, Florian Foos, Ken Greene, Dominik Hangartner, Tim Haughton, Silja Häusermann, Liesbet Hooghe, Seth Jolly, Mark Kayser, Orit Kedar, Thomas Kurer, Heike Klüver, Gary Marks, Sergi Pardos-Prado, Jon Polk, Oli Proksch, Robert Rohrschneider, Jan Rovny, Jon Slapin, Zeynep Somer-Topcu, Jae-Jae Spoon, Rune Stubager, Marco Steenbergen, Jim Stimson, James Tilley, Markus Wagner, Stephen Whitefield, Chris Wlezien, and Chris Wratil. We are also grateful to Princeton University Press, and especially our editors Sarah Caro and Hannah Paul, who supported the project from the outset and encouraged us to find our voice.

We also wish to thank Hector Solaz, who mentioned in passing that we should read The Theory of Industrial Organization by the Nobel laureate in economics Jean Tirole, because the questions and patterns we were discussing sounded much like the issues that dominant and challenger firms face. This suggestion opened up a whole new world for us. It provided us with an intellectual frame to clarify our theoretical ideas. We are grateful to Hector for engaging with our ideas and reading drafts of our chapters.

Finally, we thank our husbands, Dominik Mattmann and Hector Solaz, for all their love and support while we were writing this book. We dedicate this book to the most wonderful disruptors in our own lives, our children. As British-Danish-Dutch-Spanish-Swiss citizens of Europe, they will bring their own unique perspective to these times of change.

Introduction

Truth is found neither in the thesis nor the antithesis, but in an emergent synthesis which reconciles the two.

—GEORG WILHELM FRIEDRICH HEGEL, GERMAN PHILOSOPHER¹

The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business actually make them bad at competing for the disruption.

—CLAYTON CHRISTENSEN, AMERICAN ACADEMIC AND BUSINESS CONSULTANT²

The familiar patterns of European politics are undergoing radical change. Stable party systems, dominated by mainstream parties of the center left and center right, are fracturing. In recent years, we have witnessed the steady electoral decline of mainstream parties and the rise of political outsiders. The 2017 presidential elections in France are a case in point. Neither the candidate of the center-left Socialist Party nor the candidate of the center-right Conservative Party made it to the final runoff. Instead, the election became a contest between two challengers: Emmanuel Macron and his newly formed La République En Marche! (The republic on the move!) party and Marine Le Pen of the radical right-wing National Rally (previously National Front). France is not the only country where traditional parties have been losing ground recently. In Italy, the ruling center-left Democratic Party was beaten to the top spot in 2018 by the radical right-wing League, led by the charismatic Matteo Salvini, and the new populist party, the Five Star Movement, founded by the Italian comedian Beppe Grillo. In the Netherlands, electoral support for the traditionally strong Labour Party shrunk to single digits in the 2017 parliamentary elections. Even in Sweden, where the Social Democratic Party has dominated politics since the introduction of universal suffrage, the party received its lowest share of the vote for almost 100 years in the 2018 elections, while the far-right Swedish Democrats strongly gained in popularity.

The decline of mainstream parties has been accompanied by the rise of political outsiders, on both the right and left sides of the political spectrum. These political entrepreneurs gained electoral traction through their attacks on the political establishment and their mobilization of new issues. In the 2019 European parliamentary elections, three national populist parties—the newly formed Brexit Party in the UK, the League in Italy, and the National Rally in France—topped the polls. On the left of the political spectrum, green parties also did well. In Germany, the Greens outperformed the traditional center-left Social Democrats with a whopping 20 percent of the vote. Green challengers also performed well in several other West European countries.

What explains these upheavals in European politics? Political commentators and scholars provide a series of different interpretations. Much of the commentary has focused on the rise of right-wing populism,³ and many have pointed to structural changes to the economy, increasing globalization, and economic downturns as the root cause of this upsurge.⁴ Such explanations have drawn attention to the anger of the left-behind communities,⁵ as well as the cultural backlash against multiculturalism and immigration.⁶ While these factors no doubt are important, they do not provide a complete picture of what exactly has changed in Western European politics over the last few decades and why. The focus on right-wing populism fails to acknowledge that not all challenges to the existing political order have come from the right; some have also come from the left, like Syriza in Greece, and the center, such as La République En Marche! in France. Moreover, the emphasis on structural changes to the economy is difficult to square with the fact that challenges to the existing political order are not a new phenomenon, and nor is the trajectory of challenger parties uniform across countries. It also does not explain why challenger parties successfully entered the political arena in some countries as early as the 1970s and 1980s, while they are still marginal in others to this day. Importantly, the recent focus on the rise of populist parties tends to ignore the relative stability of mainstream parties. Other recent studies have focused explicitly on mainstream parties and their decline.⁷ As with the work on the rise of the populist right, this literature takes as a starting point structural changes to voter demand that have led to changing electoral fortunes of traditionally mainstream parties. But existing scholarship rarely seeks to explain both continuity and change in West European party competition. By focusing on the recent electoral losses of mainstream political parties and the successes of challenger parties, it is easy to overlook the fact that the story of postwar Western European politics is predominately one of the resilience of the traditional party families. Moreover, while it is tempting to focus on the uniformity of the disruption to the system, the rise of populism, the decline of social democracy, and so on, there is in fact considerable variation in the timing of challenger-party success across countries. This implies that common shocks or structural changes can only partially account for what we are observing.

This book argues that in order to understand change in European politics, we need to account for the drivers of both the political upheavals we have observed recently and the decades of relative stability and dominance of the traditional mainstream parties. Rather than simply asking why political outsiders have been so successful recently, we also need to query why mainstream parties have been able to maintain their grip on power for so long. These questions are intrinsically interlinked. Moreover, we need to be able to account for the differences in timing and degree of electoral success of political outsiders. In order to do this, we have developed a theory of political change.

Political change, we argue, evolves around two competing political forces, those of dominance and innovation. These are the forces that also shape economic change and shape the fate of companies. By drawing on an analogy of how firms compete for market share, we argue that party politics is the struggle between mainstream parties trying to keep hold of their market power and political entrepreneurs aiming to chip away at mainstream dominance. While structural changes to societies provide an important backdrop to our argument, our approach focuses on the strategies that parties employ to succeed in the political market. Political change is the result of a tug-of-war between mainstream parties seeking to protect their dominance and political entrepreneurs with innovating strategies to break this dominance.

The decades-long ascendancy of the traditional mainstream parties has been possible because the political marketplace is not a free, fully competitive market, but rather one that favors dominant parties. Dominant parties are those parties that have government experience, while challenger parties are those who have not held office. It is difficult to break through as a challenger when many voters are attached to the dominant parties, whose office experience lends them additional credibility. As a result, many challenger parties fail to make any real impact on politics. Yet, some succeed and dramatically change the political landscape. The question is why. This book suggests that as the bonds between dominant parties and their voters have loosened in recent decades, it has become more difficult for those parties to protect their market power and easier for challenger parties to challenge and disrupt the existing political order through innovation. It also suggests that the challenger parties that succeed have done so by combining a specific set of policy and rhetorical innovation strategies. In time, as these political challengers become more electorally successful, they may become the new dominant forces in politics.

The Argument in Brief

To explain why Western European party systems have remained so stable for most of the postwar period despite major economic and cultural change, but are now facing disruptions by challenger parties, we introduce a theory of political change. It borrows key insights from the literature on industrial organization in the field of economics. Industrial organization studies markets that are characterized by imperfect competition. That is to say, markets in which a limited number of firms compete.⁸ Our theory of political change allows us to explain both the resilience of dominant parties and the pathway to success of challenger parties. Our argument has four core elements:

The political market is an oligopoly: The market for votes and political office is an example of imperfect competition, because the rules of the game favor dominant parties and voters are attached to dominant parties. This makes it difficult for challenger parties to become dominant. Dominant parties actively attempt to safeguard their market power by adopting positions that appeal to a wide electoral base and focus their campaigning on issues where they are competitive.

There is weakening of this oligopoly: We are witnessing a weakening of the conditions that advantage the dominant parties. Voters are becoming more like critical consumers and less loyal to established parties, which makes it more difficult for dominant parties to safeguard their market power. The center-seeking catchall strategies of dominant parties are more likely to backfire as voters feel that parties look too similar and perceive that there is not a real political choice. Also, it has become more difficult for dominant parties to control the political agenda as wedge issues that do not fit nicely into the traditional left–right dimension in politics have emerged.

Challenger parties act as political entrepreneurs: The market power of dominant parties is constantly under attack from challenger parties that act as political entrepreneurs. Successful political entrepreneurs employ a twofold innovation strategy: (1) they introduce issues that can drive a wedge between coalitions of and within dominant parties, and (2) they use antiestablishment rhetoric to weaken the competence advantage of established parties. As voters become less loyal to dominant parties, these strategies are more likely to be electorally successful.

The party system is fragmenting: The weakening of the oligopoly and the success of challenger parties leads to market fragmentation. Market fragmentation increases the choice available to citizens, but also makes electoral outcomes more unpredictable and complicates government formation and stability.

Let us illustrate the rise of challenger parties in the political marketplace through an example from the world of business: the rise and fall of Nokia. In 1987, Nokia introduced the world’s first handheld cell phone, the Mobira Cityman 900. This iconic phone was nicknamed the Gorba after the then president of the Soviet Union Mikhail Gorbachev was seen using it the same year. However, it took a few more years before Nokia’s cell phones gained mass appeal. In the 1990s, the company started focusing solely on the telecommunications market, and developed smaller and cheaper cell phones accessible to a mass market. Their 2100 series phones became best sellers, with around 20 million handsets sold worldwide.⁹ This was the beginning of Nokia’s dominance of the cell-phone market.¹⁰ Nokia had become the market leader with mass appeal and a distinct brand. Most people who lived through the 1990s will remember the iconic Nokia Tune ringtone and the classic Snake game. When Nokia launched the Nokia 3210, with an internal antenna, in 1999, it sold 160 million units worldwide, making it one of the most popular phones in history. Nokia continued as the world leader in the cell-phone market into the early 2000s, but was not able to take advantage of the innovation in wireless and internet technologies to the same extent as some of its competitors. Most notably, Apple launched the first-generation iPhone in 2007, and the touch-screen phone grew in popularity. While Nokia introduced its own all-touch smartphone in 2008, the company was no longer the prime mover in the field. Apple was able to successfully present the introduction of the iPhone as a revolution in cell-phone technology. The iPhone was more than simply a phone: as the App Store was launched in 2008, the iPhone was enhanced as a minicomputer with personalized capabilities that could transform it into a music player, a television screen, a piano keyboard, a torch, or a compass. With this new revolution in the smartphone world, Nokia became yesterday’s news. The company’s cell-phone market share fell rapidly: from 49 percent in 2007 to 34 percent three years later. In 2011, Apple overtook Nokia in smartphone sales, and by 2013 Nokia’s market share had slipped to just 3 percent.¹¹ Apple and Samsung had become the new market leaders, with their own distinctive brands and loyal consumers.

The story of the rise and fall of Nokia illustrates what the Austrian economist Joseph Schumpeter has referred to as creative destruction.¹² This is the idea that innovation creates new companies while simultaneously destroying old ones that fail to adjust after their initial innovation has run its course. Schumpeter identifies innovation as critical for economic change. According to this view, economic change is fundamentally shaped by two forces: innovation revolving around entrepreneurs, who are doing new things or doing things that are already being done but in a new way, and dominance, which is the market power that dominant market players aim to protect.¹³ We argue that these same forces also shape change in the markets for votes, seats, and political office in Europe. Political change is as much a story of the ability of challenger parties to innovate as it is of the inability of dominant parties to respond.

Dominant and Challenger Parties

Political entrepreneurship has a long-standing tradition in Europe. Think of the rise of social democratic parties in the late nineteenth century, leaders of political student movements in the 1960s, and green parties in the 1980s, for example. What might be different today is the relative weakness of dominant parties in protecting their core market power and the resulting fragmentation of the party system. To understand the success of challenger parties today, we need to study the inability of dominant parties to adapt to a changing political environment in which critical voters are much less loyal to the major parties, as well as the capacity of challenger parties to adapt to this environment. We also need an account that can explain why challenger parties were able to disrupt mainstream dominance decades ago in some countries, while the mainstream parties have retained their dominance in others.

To illustrate this interplay between dominant and challenger parties, we borrow insights from how firms compete. Analogous to the classic economic model of party competition, we assume that parties, similarly to firms, compete for their voters by offering policies that appeal to the average voter. In the classic spatial economic model of the American economist Harold Hotelling, ice-cream vendors try to attract customers on a hot summer’s day: people who want to buy ice cream from the nearest ice-cream stand.¹⁴ Since the product, ice cream, and the associated prices are likely relatively uniform, it makes sense for beachgoers to save time and energy by walking only to the nearest seller. From the vendors’ point of view, it is sensible to locate centrally on the beach so they can attract more customers. If there are just two ice cream stalls, and the beachgoers are spread relatively evenly along the beach, then each of the ice-cream sellers will sell ice cream to half of the consumers. This principle of minimum differentiation in economic theory inspired the spatial models of party competition of the American economist Anthony Downs.¹⁵ Instead of a beach, we have a unidimensional political space, where the ice-cream vendors are political parties and the location is their political position. The assumption is that each voter will vote for the candidate or party that is closest to his or her political position. So, when a candidate takes a position to the right of the other candidate, he or she will get the votes of everyone to the right of that position. As with the ice-cream vendors on the beach, political parties will choose a political position that is virtually the same as their opponents’. Furthermore, the parties will be driven to select the political position of the median voter.

While this model can explain the strategies adopted by many mainstream parties in Europe, converging on the political center and adopting similar catchall policies to appeal to a large segment of the electorate, it cannot explain the development we have witnessed in recent years with parties seemingly on the political extremes gaining significant electoral ground. We argue that to explain the patterns of party competition in postwar Western Europe, as well as recent disruptions, we need to go beyond the model of perfect competition where all ice-cream vendors, or parties, are on an equal footing.¹⁶ There are barriers to entry that protect the dominant parties in the arena. But disruption can happen. And when it does, it is not driven by parties adopting the most centrist position on the left–right dimension, but rather by political entrepreneurs introducing new or previously ignored political issues that disrupt the political equilibrium and give the issue entrepreneur a strategic advantage. We also assume that voters, just like ice-cream consumers, care about not only the location of the party, but also the competence and integrity of the seller. As long as mainstream parties are seen as the most trustworthy and competent, it is difficult for challengers to make significant inroads. However, if that trust in the competence of the dominant parties erodes, challengers can exploit that with a powerful antiestablishment message.

We argue that understanding party politics in Western Europe requires us to explore the interplay between the two competing forces that maintain it: dominance and innovation. Dominance concerns the power of the dominant parties in the system to protect their positions. Innovation concerns the process through which political parties introduce a new or previously ignored issue, and where they use rhetorical innovation to challenge the competence of dominant parties. If the political entrepreneurship of challenger parties is successful, this may lead to a transformation of the political system. The most obvious change that successful