Populism is one of the most important political phenomena of our time. Yet, it is still poorly understood. At its core, populism is built on the notion that the masses are engaged in a struggle against corrupt elites who have rigged the political and economic system to their advantage. Whether left-wing or right-wing, this is the essence of the populist narrative: an appeal to “the people” against “the elite” and the claim to restore power to ordinary citizens by breaking the grip of entrenched interests. But can populism effectively challenge crony capitalism—a system where the political and economic elite are entangled? Can it truly dismantle the grip of entrenched interests?
In a recent working paper, we argue that populist movements are likely to fail to deliver on their promises. The reason is that populism does not resolve the dual epistemic and incentive challenges necessary for success.
The epistemic problem
Populist movements claim to embody the “true will of the people” and pledge to implement policies that prioritize the welfare of the masses over that of the elite. However, a deeper examination of societal decision-making exposes significant epistemic challenges for these leaders. These challenges stem from the inherent difficulty political decision-makers face in accurately identifying and advancing the collective will of the people.
William Riker, James Buchanan, and Timur Kuran provide key insights into why populism cannot truly assess and represent the “will of the people.”
Riker demonstrated through social choice theory that collective decision-making is inherently flawed, as different voting rules yield different outcomes and fail to translate individual preferences into a coherent aggregate representing the masses. Therefore, the idea of a unified “will of the people” is a myth.
Buchanan argued that social welfare functions—used to aggregate individual preferences into a collective decision—are fundamentally flawed. He maintained that individual preferences can only be revealed in the moment of choice and are highly dependent on the context faced by the chooser. The challenge is even greater since, as Buchanan noted, people change through time as opposed to being some fixed and pre-packaged utility function.
Lastly, Kuran’s concept of “preference falsification” adds another epistemic challenge for the populist leader in assessing the true will of the masses. Kuran argues that individuals often misrepresent or suppress their true preferences due to social pressures, fear of ostracism, or the desire to conform to prevailing norms. Consequently, the expressed public opinion may not match what people truly think or want.
Thus, the core epistemic problem of populism lies in its inability to discern and act upon a singular will of the people. Instead, populist leaders impose their own interpretation of what “the people” want, thereby reinforcing their power. The conclusion, as noted by Pierre Lemieux, is that populism is ontologically impossible because there is no way for the political leaders to assess the “will of the people.”
The incentive problem
Despite the epistemic challenge faced by populist decision-makers, someone must decide which policy will be implemented. An appreciation of the organizational logic of politics further undermines the promises of populism.
One key issue is encapsulated in what Robert Michels’s concept of the “iron law of oligarchy.” Michels argued that any organization—even one with democratic origins—inevitably concentrates power in the hands of a few. This concentration is not necessarily due to corruption, but rather the natural emergence of leadership and a division of labor. As leaders coordinate activities and manage the organization, even a populist movement can quickly devolve into a new elite structure, setting the stage for rent seeking and resource extraction akin to traditional regimes.
This problem is compounded by multiple principal-agent issues inherent in democratic systems. Voters (the principals) rely on elected officials (the agents) to implement policies on their behalf. However, voters are often poorly informed—a phenomenon known as rational ignorance—and they struggle to communicate the intensity of their preferences or monitor the complex bargaining behind policymaking. This information gap allows political agents to prioritize narrow interests over the common good, all under the guise of executing “the will of the people.”
Two factors exacerbate these incentive problems in populist settings. First, populism often leaves the scope of government intervention remarkably open-ended. Leaders can justify virtually any action as aligning with the amorphous “will of the people,” a flexibility that rent-seeking groups readily exploit to advance their own interests. Second, populist movements typically emerge from—and are sustained by—a perceived crisis. This sense of urgency fuels the rise of populist leaders and creates an environment in which expansive, crisis-driven measures become the norm. Even after the initial crisis subsides, these measures tend to persist, as entrenched interests and empowered elites continue the cycle of resource redistribution, leaving voters with little meaningful control
The future of democracy
If populism—a political movement based on the idea of representing the true will of the people and giving them a voice—is doomed to fail, is there any hope for liberal democracy? The answer to that question varies depending on how we conceptualize democracy, the idea of a self-governing people, and their relationship.
Populist movements act as if there is a singular “will of the people” that can be realized through centralized political institutions. In this framing, the problem is not with the nature of political institutions themselves, but with who controls them. However, for all of its rhetoric of empowering “the people” often collapse into existing patterns, where the elite continue to govern over the masses.
But what if we change the way we think about democracy? We often tend to envisage democracy as a top-down system, but a better alternative would be to imagine it as a network of bottom-up processes rooted in the interactions among self-governing individuals. Vincent Ostrom developed this alternative perspective in The Meaning of Democracy and the Vulnerability of Democracies. Following Alexis de Tocqueville, Ostrom argued that when citizens view government as a caretaker, individuals are more likely to “democratic despotism”—a system characterized by where elites control the rest of the population.
In contrast, Ostrom envisions democracy as emerging from associations among citizens, where person-to-person, citizen-to-citizen relationships form the basis of a truly democratic society. As he states “Democratic ways of life turn on self-organizing and self-governing capabilities rather than presuming that something called ‘the Government’ governs” (pp. 3-4).
From this perspective, meaningful change is not achieved through marginal reforms to existing political institutions or the rise of new ideological movements within the current system. These strategies fail to address the fundamental issue: elite rule through top-down command-and-control institutions. For Ostrom, overcoming democratic despotism requires a transformation in the beliefs citizens hold about the nature of the political process and their influence in self-governance.
If we truly care about individual preferences and authentic democratic participation, salvation does not lie in centralized political power—even when exercised in the name of “the people.” Instead, it is found “on principles of self-responsibility in self-governing communities of relationships” (p. 4).
Christopher Coyne is a Professor of Economics at George Mason University, the Associate Director of the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center, and the Director of the Initiative for the Study of a Stable Peace through the Hayek Program.
André Quintas is a PhD student in Economics at George Mason University and a Hayek Fellow through the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center.
