Populist actors often present themselves as defenders of “the people” while strategically boosting state capacity for select groups and undermining it overall, argues Edward L. Knudsen, a doctoral researcher at the University of Oxford and Affiliate Policy Fellow at the Jacques Delors Centre. In an interview with ECPS, Knudsen explains how modern populists “selectively increase governance measures for specific populations while often undermining them in the aggregate,” creating new forms of exclusion and weakening accountability. He highlights fiscal control as the central battleground for populist movements and warns that if democratic actors fail to adapt to the rise of state capitalism, authoritarian forces may fill the void with illiberal governance models.
Interview by Selcuk Gultasli
In recent years, the resurgence of populist and authoritarian politics has profoundly reshaped the relationship between state capacity, democratic accountability, and public goods provision. To unpack these dynamics, the European Center for Populism Studies (ECPS) spoke with Edward Lawrence Knudsen, a doctoral researcher in international relations at the University of Oxford and an Affiliate Policy Fellow in European political economy at the Jacques Delors Centre in Berlin. Knudsen’s research, particularly through his work on the Berggruen Governance Index (BGI), offers a nuanced framework for understanding how governance quality interacts with populist and illiberal strategies in both established and emerging democracies.
Knudsen argues that modern populist and authoritarian actors are not merely dismantling governance structures but “selectively increase governance measures for specific populations while often undermining them in the aggregate.”Rather than speaking for the entire nation, these actors redefine “the people” as a narrower in-group, targeting state capacity and democratic accountability to benefit this constituency. “They argue that democratic accountability should serve this group, that state capacity should be strengthened in certain areas, and that public goods provision should focus on those regions or communities,” Knudsen explains. This selective strategy challenges national-level governance indices and highlights the need for more disaggregated analytical tools.
Drawing on his article “A Falling Star,” Knudsen underscores the mutually reinforcing decline of state capacity and democratic accountability in advanced democracies, particularly the United States. He identifies a “downward spiral” in which decades of underinvestment erode state capacity, fueling dissatisfaction and boosting the appeal of populist leaders. These leaders “capitalize on pre-existing governance weaknesses by offering simple answers,” but once in power, they “rarely improve state capacity and often end up pillaging or plundering the state, further weakening it and deepening the negative spiral.”
A central thread in the interview is Knudsen’s emphasis on the fiscal dimension as the primary target of populist capture. “There’s a reason that in every democratic revolution in history, going back to the French Revolution, the first thing you try to do is seize the treasury from the monarch,” he notes. Fiscal control—both taxation and expenditure—remains the core battleground for insurgent populist movements seeking to consolidate power.
Looking ahead, Knudsen identifies the rise of state capitalism as the defining political-economic trend of the coming decade. He warns that if democratic actors cling to outdated ideas of non-intervention, they risk leaving the field open to authoritarian forces willing to use state power for illiberal ends. “If the center is not willing to counter that with a form of democratic state capitalism, then that’s the real risk for the future in terms of a rising tide of authoritarianism globally.”
This wide-ranging conversation traces how governance weaknesses enable populist exploitation, how technocratic language can mask illiberal intentions, and how democracies might strategically adapt to an era of intensified state intervention.
Here is the edited transcript of our interview with Edward Lawrence Knudsen, revised for clarity and flow.
Populism Feeds on Governance Decay
Edward Knudsen, thank you very much for joining our interview series. Let me start right away with the first question: In your article “A Falling Star,” you trace the origins of declining state capacity and democratic accountability. How do you conceptualize the causal interplay between these two dimensions, particularly in contexts where populist leaders actively erode horizontal accountability mechanisms while claiming to strengthen state capacity?
Edward Lawrence Knudsen: What’s important to note is that, as we conceptualize governance through what we call the governance triangle, all the different elements are deeply interlinked, and there isn’t a clear causal relationship where one always causes the other, or vice versa. In the article “Falling Star,” about the US, we observed that both state capacity and democratic accountability have declined substantially across different political administrations. This article was published before Trump’s re-election, so this isn’t a post-2020 development; rather, both dimensions have been deteriorating for years.
This connects to populism in an interesting way because we can see a kind of downward spiral. Much of this stems from a lack of investment going back decades, which erodes state capacity. That, in turn, fuels disaffection, dissatisfaction, and frustration, increasing the political appeal of populist leaders. They capitalize on pre-existing governance weaknesses by offering simple answers, as is typical of populist rhetoric. However, once in power, they rarely improve state capacity and often end up pillaging or plundering the state, further weakening it and deepening the negative spiral.
In short, some degree of prior erosion opens the door to populist—especially right-wing populist—governments that claim they will fix state capacity but don’t, while often being more willing to erode democratic accountability even further.
Selective Strengthening, Aggregate Erosion
The Berggruen Governance Index (BGI) emphasizes the triangular relationship between public goods provision, democratic accountability, and state capacity. How does this framework help us understand the governance strategies of contemporary populist or authoritarian actors, who often deliver selective public goods while undermining accountability?
Edward Lawrence Knudsen: What’s important to mention when we talk about modern populist styles of government and political appeal in relation to our quantitative index of governance indicators is that we designed this system to cover almost the entire world and across different time periods. The measures we use are geared toward capturing as wide a range of political and regime types as possible.
There’s a way in which a particular type of political appeal that emerges in one part of the world or another over specific periods of time doesn’t necessarily challenge quantitative indices outright, but it does make us look at them differently. By that, I mean that these indicators measure governance at the aggregate national level.
What’s so interesting about populism—particularly the more clientelist, right-wing populism surging globally today—is that it explicitly doesn’t try to speak for the entire country. This is where we need to disaggregate from national-level frameworks. Instead of treating “the people” as the whole electorate and assessing democratic accountability and public goods provision for the entire population, these actors explicitly claim, “These are the true people.”
They argue that democratic accountability should serve this group, that state capacity should be strengthened in certain areas, and that public goods provision should focus on those regions or communities. In this sense, populist or authoritarian strategies selectively increase governance measures for specific populations while often undermining them in the aggregate.
Eroded State Capacity Fuels Populist Appeal
Your work identifies long-term stagnation in core state capacities in several advanced democracies. To what extent do such governance weaknesses create structural openings for populist or authoritarian movements, and are there historical cases where strong state capacity has insulated democracies against such pressures?
Edward Lawrence Knudsen: This ties back to my first point about the US case, but you also see it across the world, where there’s widespread dissatisfaction with the existing order, leading people to complain about the state of things and become more open to populist appeals. You see this both anecdotally and in a lot of polling, where voters for right-wing, populist, and authoritarian parties often have complaints that dovetail quite closely with a more left critique. They say things like, “The public services are all eroded, there’s not enough opportunity, my kids can’t afford a house.” Those kinds of statements—thinking of the UK context, for example, where people interviewed recently who support the UK Reform Party—sound almost like a Corbynite, left-populist argument. But instead, they’re drawn to the right.
People’s dissatisfaction with elements of state capacity, infrastructure, or the ability of the state to deliver both public goods and services increases the potential appeal of populism. And it’s very difficult to combat these sorts of populist and authoritarian political movements in the short term because, as we know, it takes a long time to build up these capacities. By the time you notice that your eroded state capacity is allowing an opening for a populist or authoritarian party to move in, it’s not necessarily too late, but there’s a lot of ground to cover.
We saw this in the US again, where many in the Biden administration shared the diagnosis of Trump’s appeal in his first term. They scrambled to implement big infrastructure projects—both increasing public goods like infrastructure investment and strengthening state capacity by trying to improve the US bureaucracy and deliver more effectively for people. But it’s very hard to get any of that off the ground in time for the next election, and that can contribute to more dissatisfaction. People say, “There’s all this rhetoric about rebuilding America, build back better, this and that, but I’m not seeing it. Okay, let’s go for the more radical, tear-it-all-down, simple solutions.”
In the short run, it’s hard to think of examples where there’s suddenly a big push into new state capacity that keeps populists away. But as we find in countries with stronger state capacities, there tends to be less appeal. Populist governments have still emerged across even very wealthy, developed countries. That said, the countries—especially in Europe—where the populist right has perhaps peaked or is advancing more slowly are those with more substantial state capacity that haven’t fully embraced the neoliberal reforms of the past several decades and haven’t eroded their state to the same extent as others.
Authoritarian Capture Begins with the Treasury
You emphasize fiscal, coordination, and delivery capacity as key subdimensions of state capacity. Which of these dimensions do populist governments tend to exploit most effectively to consolidate power, and which dimensions are most vulnerable to authoritarian capture?
Edward Lawrence Knudsen: The main target of any insurgent power seeking to take control is, of course, the fiscal apparatus. We see this notably and dramatically in the US case, both in terms of taking in state revenues and giving out expenditures. The Trump administration really tried to instrumentalize both sides of that—whether by going after political opponents for alleged tax noncompliance or by trying to keep money from going out the door to perceived political opponents, using that as a kind of threat. There’s a reason that in every democratic revolution in history, going back to the French Revolution, the first thing you try to do is seize the treasury from the monarch. That’s a key measure of democracy: does the parliament have control over the purse strings of the country? If you really boil it down, in many ways that is the core of democracy—who has sovereignty over spending and taxation. This is probably the central element of contestation for many populist and authoritarian governments.
When it comes to delivery capacity, this ties into the idea of favored groups, political allies, and opponents—you want to deliver for one group or another. The story there is somewhat similar to fiscal capacity, but it’s a little more complex to instrumentalize directly. Often, insurgent parties lack the bureaucratic expertise to seize those control levers effectively. This is what’s different with the second Trump administration—it learned on the job and was able to come in more effectively this time around.
However, the ability to coordinate across different agencies and levels of government is often the Achilles’ heel of many populist governments, because they lack experience working within bureaucratic systems. In many cases, from a democratic perspective, this is quite alarming: governments come into power but aren’t able to fully consolidate their rule because of difficulties in seizing coordination capacity. So, fiscal capacity is the main target and one of the most obvious areas they can use to seize power, but this can be undermined by their failure to fully grasp the complexity of coordination capacity in a modern governance context.
Global North Nostalgia vs. Global South Frustration
In your comparative work on Argentina, Brazil, and Colombia, you describe how governance challenges can lead to “lost decades.” To what extent can the populist-authoritarian trajectories of leaders such as Bolsonaro or Kirchnerism be read through the lens of state capacity decay, and are similar dynamics visible in parts of Europe and North America?
Edward Lawrence Knudsen: It’s always important to distinguish right from left populism. The Argentinian case is quite complex with Peronism and then Kirchnerism, but there are elements of left-wing politics there that have, over the decades, tried to build up the Argentinian state. By contrast, the more right-populist Bolsonaro side of things has much stronger sympathies with libertarianism and is, in that way, more aligned with a Milei-type figure in Argentina. Of course, Milei may share some authoritarian commonalities with Kirchnerism, but they are major political rivals and have emerged from very different political trajectories.
It is therefore always important—especially for an institute that studies populism more broadly—to separate left and right populism. While there are some commonalities, there are also clear differences in their goals and approaches. As you say, the lens of state capacity decay is crucial here. Bolsonaro falls more in line with the Trump approach of seizing on dissatisfaction without necessarily offering meaningful ways to improve it.
His political base also differs significantly from those in many European and North American contexts. Although figures like Trump and Bolsonaro are often compared in a global context, their political bases are actually very different. In Latin America, right-wing populists tend to draw on a more traditional right-wing social base—upper and middle classes—while the working class still largely votes for the left. This pattern is almost inverted in much of Europe and especially North America, where the so-called “Brahmin left” votes for the Democratic Party and much of the working class supports Trump.
So, while there are similarities in their governance approaches, their political bases differ markedly. This reflects different types of dissatisfaction. In the Global North, it’s often a feeling of lost promise—that strong state capacity once existed but has since eroded. In much of the Global South and middle-income countries, it’s more anger that the state has never been effectively built; it’s a desire to accelerate state-building, not nostalgia for a lost golden age. So, while there are parallels, all related to state capacity, the class bases of their support and their historical expectations differ significantly.
Technocratic Inertia and Populist Frustration
In “Stable or Stagnant,” you examine the political economy of governance in the UK, France, and Italy. How has the interaction between technocratic inertia and populist mobilization shaped governance outcomes in these countries, and do they offer lessons for newer democracies confronting similar tensions?
Edward Lawrence Knudsen: The word you used there—inertia—is very important. It keeps coming back to an answer I’ve given a few times already, and that’s frustration. In the European context, these appeals have even more power because there’s this perception of Brussels as a kind of bureaucratic monster, which, of course, is not really true. There aren’t that many people who actually work for the European Commission. But there’s this idea of a supranational political body that is stagnating innovation and growth.
That perception contributes to frustration, which relates closely to populist appeals—the notion that there’s something simple and easy to do, the Trump’s “only I can fix it” logic, or “just leave the European Union and everything will get better.” As we’re finding out, these issues are far more complex than that. The mere perception of bureaucratic inertia can be enough—or at least a significant driving force—in the success of populist appeals.
That said, perception alone wouldn’t be enough if people’s lives were genuinely improving. In Europe especially, while the political appeal might focus on the idea of an overweening state, much of the dissatisfaction people feel in their daily lives actually stems from state cutbacks and a lack of investment. We saw this particularly after the 2008 crisis and the subsequent Eurozone crises, when severe austerity was imposed across Europe. That’s when state capacity began to decline significantly, and the rise of many populist parties followed.
These parties often say things like “Brussels is controlling us” or refer to the “EUSSR”—the kinds of simplistic slogans that circulate—but in reality, much of the dissatisfaction politicians harness comes from the state not being active enough.
Endogenous Weaknesses, Exogenous Shocks
How do you interpret the recent surge of sovereigntist populism and illiberalism in Central and Eastern Europe through the lens of the BGI framework? Do these developments reflect endogenous weaknesses in state capacity that populist leaders exploit, or are they primarily authoritarian reactions to exogenous shocks such as migration, EU conditionality, war?
Edward Lawrence Knudsen: There are some previous endogenous weaknesses in these cases, such as weaker traditions of an independent judiciary and less entrenched media pluralism. In a way, we could say these are not as consolidated democracies. There is also a kind of civilizational legacy at play, visible in competing understandings of the idea of Europe. Towards the end of the Cold War in the late 1980s, you see this rhetoric in much of Eastern Europe with the impending fall of the communist system—this idea of a “return to Europe” and a civilizational understanding of Europe. In Western Europe, especially among people on the left, there was a sense of transcending these older views of civilization and nationalism, whereas in Eastern Europe, they felt like they never quite got to enjoy that.
It’s hard to capture this in terms of governance, but there are competing understandings of what it means to be a modern European state and how much ethnic homogeneity that implies, which triggers very different reactions to migration. This is something you have to be honest about when doing quantitative indicator work—there are historical factors you’re simply not going to capture, which is why we write reports with more qualitative background as well.
That being said, there are many things we do capture in our work. Even something as simple as GDP per capita shows a lot of catch-up growth in Central and Eastern Europe—Poland being one of the best examples. From a Western perspective, it’s easy to say, “Here’s our GDP line, and here’s the Polish one catching up.” It looks striking visually on a graph. But people there ask, “Why aren’t we richer than Germany? When are we going to get there?” Structurally, the way things are set up in the European Union—in terms of supply chains and where value is really added—makes it difficult for them to fully overtake Germany.
This contributes to some of the dissatisfaction. Along with lower GDP per capita, there are lower levels of public goods provision. So, the story is not so much one of decline as of insufficient growth. Combined with less entrenched democratic norms, this allows populist forces to exploit both frustration with the lack of catch-up speed and incomplete democratic consolidation. These two factors together can create a potent and toxic mix.
The Politics of Misplaced Trust
In “The 21st Century Trust and Leadership Problem,” you argue that declining institutional trust undermines governance. How do populist actors strategically exploit trust deficits to delegitimize institutions, and what tools can democratic leaders use to rebuild trust in polarized societies?
Edward Lawrence Knudsen: In politics, trust is a somewhat fuzzy concept. This comes from an article that’s not part of the Berggruen Governance Index, which I co-authored with Professor Helmut K. Anheier, who also leads the INDEX project. Trust is something we’re actually thinking about incorporating into the index more directly because it’s so important. What’s vital to understand is that politics requires some degree of trust—people want to place their trust in something. So, when institutional trust erodes, which is what we’re seeing, this is essentially another way of talking about the decline in state capacity. People see that the state isn’t delivering, and they end up trusting it less.
But their instinct and desire to trust don’t disappear; they get redirected. Often, in the context of populism and authoritarianism, that trust, rather than being placed in institutions that are no longer deemed trustworthy, is transferred to a singular person or party. This is where the “trust me, only I can fix it” narrative or promises of “simple solutions” come in. In many ways, populist appeals can be seen as a form of misplaced or transferred trust that has moved away from more appropriate targets—like independent media or local government services. People want to be able to rely on institutions at different levels. When they no longer can—when they think, “They’re never going to pick up the trash,” or “The media’s always lying to me”—those instincts are redirected toward a more demagogic figure who promises, “I’ll fix everything, and I’m the only one telling you the truth.”
Yes, populists exploit trust deficits, but they also capture people’s desire to trust something. And in many cases, they ultimately betray that trust and fail to deliver, which deepens the problem. They also encourage people to distrust other institutions, even those that are still functioning at a high level—such as research universities. While there may be issues within these institutions, the claim that they’re systematically producing fake science, for example, shows how justified distrust in some areas can be transferred to others where it’s not justified, ultimately undermining the entire system.
Leadership in Times of Governance Crisis
You highlight leadership as a critical factor in reversing governance crises. What institutional safeguards or leadership selection mechanisms might help prevent the rise of authoritarian-populist figures who exploit weak accountability structures for personalist rule?
Edward Lawrence Knudsen: The issue of leadership here is really difficult because it’s one of those things that, if you prefer a more structural or material account of the world, feels somewhat unsatisfying and fuzzy to talk about—the importance of leadership. How do you select for that? How do you account for one individual having integrity? It feels very risky from a democratic perspective to say, “We’re going to stake our future on just hoping we get a good guy or a good woman in power.”
That being said, there are important factors to consider. There are actual institutional selection mechanisms, such as greater meritocratic promotion in bureaucracies. That’s an element of state capacity that we capture, and it’s the kind of building block of a modern state that you would, of course, want to have.
On the fuzzier side, there are issues of norms—saying, for example, “No, we’re not going to tolerate more demagogical or corrupt figures.” This ties back to feelings of dissatisfaction, where those norms can break down if people feel they no longer deliver the goods, or if they’re being told to live by a set of norms that elites themselves do not follow. When you see a decline in opportunity, state capacity, and public goods provision, people feel like these rules and norms aren’t delivering anymore. Then they’re more open to a type of appeal that says, “Yeah, it’s all a scam, and I’m a scammer too, but I’ll scam on your behalf.”
So, you can’t necessarily draw a one-to-one connection between a specific level of state capacity decline and the selection of a particular type of leader. However, there are clear patterns where a broader lack of integrity and fairness in society makes the appeal of someone who openly flouts ideas of fairness more likely.
Strong Managers or Strategic Demagogues?
Many populist leaders claim to be “strong managers” while simultaneously undermining institutions—blending technocratic rhetoric with authoritarian tendencies. How can we analytically distinguish between genuine technocratic competence and populist instrumentalization of technocratic language to justify illiberal measures?
Edward Lawrence Knudsen: There’s this book that came out a few years ago, which maybe you’re alluding to, Techno-Populism by Carlo Invernizzi Accetti and Christopher J. Bickerton. They speak to this idea of two concepts that seem like they’re at odds with each other. Populism is a sort of mass of people resisting the technocrats, and technocracy is this sort of cloistered room of Davos elites tweaking the economy—those are the stereotypes. But what they point out is that there’s actually a way in which the two can go together, that’s not always obvious, and that’s the populist appeal to technocratic instincts: “We’re just going to get the best and the smartest people in there, and they’ll fix all of this.”
Understanding that there are linkages between those two is very important. There is a tension, though, often in the notion of “strong managers.” The phrasing itself almost seems contradictory because you think of strong leaders and then you think of competent managers, and so “strong managers” has a kind of built-in tension as a phrase and as a concept. The two are often at odds. There are ways in which you might need to rouse a population for a great struggle, but the day-to-day business of government is a lot more bland than that. You don’t need a Winston Churchill “we will fight them on the beaches” kind of speech to figure out how to successfully devolve council taxes to local governments in Britain, for example. They’re very different things, and oftentimes the two don’t really go together.
The struggle for populists is actually creating that linkage between a more nationalist appeal, which can generate large-scale political mobilization, and then implementing that on the ground. Again, to stay with the UK example, there was a Financial Times article recently about UK Reform’s struggles in local councils. They have all this lofty nationalist rhetoric, but when it actually comes to the things people care about, it’s very hard to deliver. For people who are more democratically inclined, that is in some ways a blessing—there’s an opening to discredit some of these more nationalist and populist movements.
Things will become a lot more dangerous if there’s a form of populist authoritarian governance that figures out how to move beyond just the technocratic language you described to actual technocratic competence. That’s when you’ll see a more enduring political form. As it stands now, if people see it’s not working, they’ll throw them out again after a few years. The more politically successful forms of authoritarianism actually are technocratically competent, or at least strive to be for their preferred groups.
Governing in the Age of State Capitalism
And finally, situating your work within the broader global context, how do you see the interplay between governance quality, populism, and authoritarianism evolving over the next decade? Do you anticipate cyclical populist waves, or a more entrenched structural realignment toward illiberal governance models in both established and emerging democracies?
Edward Lawrence Knudsen: It’s hard to say at the global level whether we’ll see a clear wave or not because there are so many local specifics. What we can say on a larger level is that we’re witnessing the rise of state capitalism as a form of political economy. There is a lot more direct intervention of the state in the economy—not in a socialist or communist way, but rather using it for desired political ends in domestic politics, international politics, geopolitics, and geoeconomics, as it’s increasingly called. That’s the main trend.
Of course, populism will come in different forms. It’s a contested term. But I would say that the overall rising tide of liberal democracy is no longer moving in that direction. I wouldn’t say it’s definitely shifting toward complete authoritarianism, either. The challenge will be that, given the likely irresistible rise of state intervention in the economy for the foreseeable future, it will be incumbent on democratic forces to wield that intervention in a way that delivers for people and neutralizes some of the appeals of more authoritarian parties.
One of the main risks would be if more established democratic parties cling to ideas of non-intervention in the economy, rather than recognizing this as the new reality and using it to deliver for people and promote greater equality. If they keep their heads in the sand and cling to these 1980s or 1990s norms of relative non-intervention, it opens the door for more simplistic approaches. You see that in the US case, where many market-liberal types say, “We’re not going to nationalize US Steel,” or “We’re not going to ban AI truck drivers,” while more populist-inclined actors—who often have no real democratic commitments—say, “Of course we’ll do that. Of course we’ll protect the truck drivers. Of course we’ll protect the steel workers.”
When there are changing economic times and increasing uncertainty, people will naturally gravitate toward those kinds of simple appeals. If the center is not willing to counter that with a form of democratic state capitalism, then that’s the real risk for the future in terms of a rising tide of authoritarianism globally.
