Polls of western countries find deep dissatisfaction with democracy

An Ipsos survey across nine Western countries reveals widespread public dissatisfaction with democracy, with majorities in most fearing for its future due to perceived threats like fake news, corruption, and lack of accountability. The findings indicate a strong desire for 'radical change' and a prevalent belief that the system is rigged in favor of the wealthy, potentially signaling increased political instability, policy shifts, or social unrest that could impact long-term investment climates and market sentiment, particularly in countries like France, the Netherlands, and the US where dissatisfaction is pronounced.

Analysis

An Ipsos survey across nine Western countries reveals profound public dissatisfaction with the current state of democracy, with satisfaction rates below 50% in eight nations and as low as 18% in Croatia and 19% in France. Majorities in all surveyed countries except Sweden express fear for democracy's future, highlighting a significant erosion of public trust in political systems. This widespread sentiment signals growing political instability across key global economies.

Key drivers of this dissatisfaction include perceived threats such as fake news, lack of political accountability, extremism, and corruption, with disinformation cited as the biggest danger in countries like the UK (64%) and Poland (76%). Corruption is a primary concern in the US (63%) and Southern European nations like Spain (73%) and Croatia (80%). This indicates a complex set of systemic issues undermining governance effectiveness.

The survey identifies a strong desire for "radical change" across most countries, with support reaching 69% in Croatia and 66% in France, alongside a prevalent belief that the system is rigged in favor of the rich and powerful. This sentiment, coupled with a "strongly negative" overall sentiment and "pessimistic" tone, suggests a heightened risk of social unrest and significant policy shifts. Such shifts could manifest as increased regulation, particularly in areas like anti-corruption and social media, potentially impacting various sectors.

Key Decisions for Investors

• Investors should assess the heightened political risk and potential for social instability in Western democracies, particularly in countries with high dissatisfaction like France and the US, as this could impact long-term market stability and asset valuations.
• Monitor for increased regulatory scrutiny and legislative changes targeting corruption, social media, and economic inequality, which could affect corporate governance and profitability in various sectors.
• Evaluate the resilience of portfolio companies to potential policy shifts and public pressure for "radical change," especially those perceived as benefiting from the current system or operating in heavily regulated industries.