The populist contagion sweeping some of the most advanced countries is seeping through to key emerging markets, including SA. This undermines the coherence of economic policy, as well as confidence in it. Policy stability, certainty and consistency are at risk if we do not arrest the trend towards populism. This has only been partially accomplished in SA. Populists are not ideological, but they are antipluralist, do not respect the democratic process and take a position that is based on opposing established elites in politics and business. This is not necessarily a bad thing, since they do raise the right questions about burning issues. However, populists tend to provide the wrong answers. The economic policies they pursue will be short-term, but short-term gains will incur long-term costs. A historical perspective is instructive. In 1991, two economists — Rudi Dornbusch and Sebastián Edwards — edited a book of studies on macroeconomic populism in Latin America. The key argumen...

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