From Duterte to Orbán: the political economy of autocratic hedging

Abstract

How do autocracies survive? We argue that autocrats pursue a two-step strategy of autocratic hedging to ward off international pressure, diminish the power of domestic rivals, and consolidate their positions. First, autocrats who successfully "hedge" against critics do this by seeking rebalancers, such as firms or foreign leaders, who can redirect capital towards the autocrat's economy and break apart coalitional challengers. Second, autocrats use inducements, ambiguity, and mass mobilization to manipulate international conditions in their favor to avoid isolation and maintain legitimacy. Drawing on interviews in the field and secondary research, we illustrate our concept of autocratic hedging using the Philippines' Rodrigo Duterte (2016-2022) and Hungary's Viktor Orbán (2010-). Going beyond the existing literature that focuses on how autocrats stifle domestic pressure or use institutional features of the regime to stay in power, we develop an interactive framework that shows how autocratic hedging has allowed some rulers to place international capital in the service of the autocrat's power consolidation. Furthermore, most studies explain autocratic survival by using the state as the unit of analysis. In contrast, this article finds that multiple levels of interaction among rulers, firms, domestic constituencies, and foreign leaders matter to autocratic hedging and survival.