Strongmen create fragile economies

Economic stability has rarely been the product of individual will, however forceful or decisive a leader may appear. Across history, sustained growth and social resilience have depended on institutions that distribute authority, constrain impulse and allow economic policy to correct itself when mistakes are made. Yet across political systems today, economic decision making is once again becoming increasingly personalised. Leaders are centralising authority, sidelining institutions and framing economic policy as an extension of political identity. This return of strongman economics carries serious consequences, not only for individual societies but for global stability.

Strongman economics is not defined by ideology. It has emerged under socialist planning, nationalist protectionism and market-oriented reform alike. Its defining feature is procedural. Decisions are taken by a narrow leadership circle, consultation is limited and institutions are expected to execute rather than deliberate. Central banks, regulators and advisory bodies may formally exist, but their independence is conditional. Predictability declines, reversals become frequent and accountability weakens.

In the contemporary world, this pattern is visible across several major economies. In the United States under Donald Trump, economic policy often reflected personalised authority rather than institutional coordination. Tariffs were imposed abruptly on allies and rivals, framed as tools of leverage rather than components of a negotiated trade framework. Global supply chains were disrupted. investment planning became uncertain and the credibility of multilateral trade institutions weakened. Markets were unsettled not only by protectionism itself but by the unpredictability of decisions driven by individual discretion.

This personalised approach extended to monetary policy. Repeated public pressure on the Federal Reserve eroded perceptions of central bank independence, a cornerstone of global financial stability. Even without formal interference, the normalisation of political pressure on monetary authorities injected volatility into global capital flows.

Turkey offers a sharper illustration. President Recep Tayyip Erdoğan’s rejection of orthodox monetary policy led to repeated interventions in central bank functioning. Governors were removed when interest rate decisions diverged from presidential preferences. Inflation surged, the currency collapsed and household purchasing power eroded rapidly. The consequences extended beyond Turkey’s borders, reinforcing investor anxiety about political interference in emerging market institutions.

China under Xi Jinping represents a more centralised as well as an opaque version of strongman economics. Regulatory crackdowns on technology firms, private education companies and property developers were executed swiftly but with limited transparency. While some measures addressed genuine systemic risks, the absence of clear regulatory pathways unsettled global investors. Capital became cautious, supply chains diversified and confidence in policy predictability weakened. When economic authority is tightly centralised and subordinated to political priorities, even corrective actions generate global uncertainty.

Argentina under President Javier Milei presents an emerging variation. Sweeping deregulation and fiscal shock therapy have been driven largely through executive authority. Markets have responded positively to the promise of reform, but social resistance has intensified. The concentration of economic power in the presidency raises familiar questions about durability, political legitimacy and whether reform can survive without institutional consensus.

To understand why these developments matter, it is essential to look to the past. History provides numerous examples where personalised economic power produced lasting harm.

One of the most devastating cases was Mao Zedong’s Great Leap Forward. Economic targets were dictated from the top, dissent was suppressed and expertise dismissed as ideological weakness. Agricultural collectivisation and industrial quotas ignored material realities. The result was catastrophic famine, the deaths of millions and long-term damage to social trust. This episode remains a stark reminder that when economic policy becomes an expression of political will rather than empirical constraint, human costs are inevitable.

The Soviet Union under Joseph Stalin institutionalised personalised economic authority over decades. Central planning functioned less as a technocratic system and more as a mechanism of political control. Short term industrial output masked inefficiencies, technological stagnation and widespread deprivation. The absence of independent feedback mechanisms meant errors persisted uncorrected. Globally, the system contributed to decades of economic bifurcation and geopolitical rivalry, demonstrating how inward-looking economic absolutism can harden international divisions.

Zimbabwe under Robert Mugabe offers a more recent illustration. Politically driven land seizures were implemented without institutional safeguards or economic planning. Agricultural output collapsed, hyperinflation wiped out savings and livelihoods were destroyed. The consequences spilled across borders through food shortages and migration, highlighting how domestic economic decisions rooted in political authority can destabilise entire regions.

Latin America has repeatedly confronted the legacy of strongman economics. Argentina under Juan Perón embraced wage and price controls driven by personal authority and mass mobilisation. While politically popular in the short term, these measures distorted incentives and entrenched inflationary cycles that persist today. Venezuela under Hugo Chávez and later Nicolás Maduro expanded this approach through nationalisations and rigid price controls. The collapse that followed produced mass migration, regional instability and the near destruction of state capacity.

The Philippines under Ferdinand Marcos demonstrates how personalised economic authority often merges with crony capitalism. State resources were channelled to political loyalists, debt mounted and investor confidence collapsed. The long recovery that followed illustrated how deeply such systems can scar national development.

Even Europe’s interwar experience offers warnings. In Nazi Germany, economic policy was subordinated to ideological and militaristic objectives directed by central authority. Rearmament and autarky created short term employment but left the economy structurally distorted and dependent on expansion through conflict. The global catastrophe that followed underscored how personalised economic ambition can trigger
systemic collapse.

Across these diverse cases, the pattern is strikingly consistent. Strongman economics weakens institutions first. Independent regulators are marginalised, expert advice becomes conditional and dissent is reframed as obstruction. Short term gains may follow. Employment can rise, inflation may be suppressed temporarily or markets may rally on perceived decisiveness. But without institutional correction mechanisms, errors compound rather than self-correct.

For societies, the harm is deeply personal. Jobs disappear when investment retreats. Savings evaporate when currencies collapse. Inequality widens as access to power determines access to opportunity. Trust in economic rules erodes, replaced by uncertainty and cynicism. For states, the damage is structural. Policy reversals become frequent, credibility erodes and long-term planning becomes difficult. International partners struggle to anticipate decisions driven by personality rather than process, weakening cooperation at a time when shared challenges demand coordination.

At the global level, the return of strongman economics increases systemic risk. Trade, energy and financial systems are deeply interconnected. Unilateral decisions ripple outward, amplifying volatility. The erosion of multilateral norms weakens collective responses to inflation, climate change and financial crises precisely when they are most needed.

The writer is a policy analyst focusing on employment, demographics, and economic development.