Challenger Parties and Populism

The recent rise of populist parties across Europe has attracted much attention. But is this a new phenomenon? In this article, we argue that populist parties can be seen as a type of challenger parties, that is, political entrepreneurs without government experience seeking to disrupt the dominance of mainstream parties. We discuss how ongoing changes in European party systems compares with previous waves of challenger parties, including social democratic and green parties. We then present the core strategies used by successful challengers, namely issue entrepreneurship and anti-establishment rhetoric, as they mobilize issues that gives them an electoral advantage and attack the competence of the established political parties. Finally, we consider what the rise of challenger parties may mean for democracy in Europe.1


Introduction
Populist parties are on the rise across Europe, and the familiar patterns of European politics are undergoing radical change. In recent years, we have witnessed the steady electoral decline of mainstream parties. This decline has been accompanied by the rise of political outsiders, both on the right and left of the political spectrum. These political entrepreneurs have gained electoral traction through their attacks on the political establishment and their deployment of new issues. The 2017 presidential elections in France are a case in point. Neither the candidate of the center-left Socialist Party nor the candidate of the center-right Conservative Party made it to the final run-off. Instead, the election became a contest between two challengers: Emmanuel Macron and his newly formed La Republique En Marche! party and Marine Le Pen of the radical right-wing National Rally (previously National Front). While both parties were challengers without previous office-holding experience, only one of these parties is what we would classify as 'populist', namely Le Pen's National Rally. In contrast, Macron's En Marche, which became the party in office, is a centrist and liberal force.
In this article we argue that, while populism is a distinct political phenomenon, most populist parties can also be classified within a broader category of ' challenger parties'. By studying the recent rise of populist parties through the lens of challenger parties, we can place it in a broader historical context and identify the core strategies such parties employ.
Before we move to commonalities between challengers and populist parties, let us start with the differences. Challenger parties are those that have not (yet) had the opportunity to control policy or government [1,2,3]. If we conceive of the political marketplace as a struggle between long-standing dominant market forces or parties and disruptive challenger parties, the central objective for both types of party is the control of office and the delivery of public policies. The aim is either to maintain power or to gain power. Parties in opposition may have some influence over the design of public policy through the legislative process, but ultimately it is the parties in government that control the provision of public policy. Hence, parties with no recent experience in office are in a fundamentally different position in the marketplace, a position that offers both opportunities and imposes limitations. There may be a number of reasons as to why parties have not had a controlling role in office. Pragmatically, they may be too small to form a meaningful part of a coalition government or may be newly formed; ideologically, they may be unwilling to make the necessary compromises to join a coalition government, or they may be seen as too extreme to be part of government by mainstream parties. This lack of participation means that such parties have every incentive to challenge the dominance of existing players through political innovation.
Most populist parties are also challengers, although some do end up in government. Yet the starting point for the classification of populist parties is not their structural position in the political marketplace, but rather an ideational approach that focuses on the shared ideological foundation of these parties. The most influential conceptualizations of populist parties have been put forward by Margaret Canovan [4] and Cas Mudde [5]. They rest on the understanding of populism as a thin-centered ideology. Populism separates society into two homogeneous and antagonistic groups, 'the pure people' and 'the corrupt elite', and holds that politics should be an expression of 'the general will' of the people. Because populism is a thin-centered ideology based around this binary distinction, it is extremely malleable and can easily be integrated into another more complex host ideology, such as socialism or liberalism. This means that populist parties can be found on both the left and the right-or indeed the center-of the political spectrum.
Much of the literature on populist parties in Europe has focused on populist parties on the right and has included nativism as a key element of populism [6]. Such definitions of populist parties are more ideological and include an emphasis on expressions of nativism and xenophobic nationalism. When nativism is often included as a core element of populism, the parties classified as populist are often seen as necessarily belonging to the 'populist radical right'. Within this definition, the core features of populist parties are therefore anti-elitism and the belief in the homogenous 'pure people' and, for those on the radical right, nativism.
These definitions of populist parties take as their starting point the ideology of these parties, while our approach to challenger parties focuses on the position of parties within the system, as either challenger or dominant parties. We argue that we can learn about the recent rise of populist parties by first exploring what the current wave of populist challengers has in common with earlier waves, then by discussing two core strategies of contemporary challenger parties, before finally considering the implications for European democracies.

Waves of Challenger Parties
Are challenger parties on the rise? Media coverage of challenger parties, especially those on the populist radical right in countries such as Austria, France, Italy, and the Netherlands, may have given the impression that the traditional European party systems have almost entirely imploded. Yet a closer empirical examination of this claim suggests that patterns of party competition are more stable than recent events would possibly suggest. If we plot the vote share by party families over the last one hundred years, we can see that the 'traditional' party families, the conservative/Christian democrats, the socialist/social democrats, and the liberals still dominate West European party politics. This is illustrated in Figure 1, which displays the share of the vote gained by traditional party families in parliamentary elections from 1918 to 2019.
The picture that emerges from Figure 1 is that the three major party families were dominant from the 1920s to the late 1970s, with party fragmentation beginning in the early 1980s and becoming more apparent over the last decade. However, even within this picture of relative stability, we can observe shifting patterns. The 1920s and 1930s saw the rise of the social democrats and, in some countries, the rise of the far right. In the post-war 1940s, stronger radical left parties emerged and the liberals went into decline. The 1980s can be characterized by the emergence of the green party family along with the radical right, while in the 2010s, the radical left and the radical right grew stronger as the social democratic party family waned. Each of these shifts represents a wave of challenges to the dominant political order, which have important parallels with recent developments.
At first glance, the current wave of populist parties on the right and the left may appear to have little in common with the most quintessential mainstream party family, the social democratic family. Yet, at the close of the 19th century, when they emerged as a challenger force in Europe, the social democrat parties also grew out of a division [7]. The divide was within the socialist movement, between those who insisted upon political revolution as a precondition for the achievement of socialist goals and those who maintained that a gradual or evolutionary path to socialism was both possible and desirable [8]. The dominant parties at the time were liberal, conservative, and Christian democratic parties, and to challenge their dominance, the social democratic parties employed many of the political entrepreneurial strategies that we see challenger parties using today.
First, they were issue entrepreneurs. They had radical objectives involving a complete restructuring of the economy and society through social revolution and the abolition of classes. Second, social democratic parties were inherently anti-establishment in their rhetoric [9], given that as long as workers were denied full political rights, the ambitions of the social democratic movement were fundamentally at odds with the political establishment. They used both parliamentary and insurrectionary methods to achieve their core goal of workers' suffrage, including general strikes, all of which used rhetoric aimed at the establishment. Indeed, in the early years social democratic parties were considered a danger to the established political and economic system. In Germany, for example, Chancellor Otto von Bismarck attempted to outlaw the social democrats in 1878 for their pro-revolution, anti-monarchy sentiments.
As social democratic parties became more dominant in the early 20th century, their political strategies evolved. From being outsiders that had helped to define a new political battleground, they were now insiders trying to defend the status quo [9], having entered office and made universal suffrage a reality. This meant anti-establishment rhetoric became muted, with social democratic parties now committed to parliamentary democracy as a way of achieving incremental political change. Alongside this, many social democratic parties also formed coalitions with other parties, which had a moderating influence on their own policies and rhetoric. This growth in power, however, created a dilemma: the working class was not sufficiently numerous to guarantee electoral victory, but their social-democratic policies were intended almost solely to appeal to the working classes [8]. They chose the pragmatic route out of this dilemma, attempting to appeal to a broader electorate, diluting their original class-based policies [10].
By the 1970s and 1980s, the erstwhile challengers were preoccupied with protecting their now dominant position in the system against new challengers, on both the left and the right. On the left, a new wave of social movements and parties emerged across Western societies, campaigning on a 'new politics' agenda of ecology, disarmament, and self-determination. These left-wing parties achieved some moderate success in Western Europe but were also met by a 'silent counter revolution' [11] in the form of the rise of the populist radical right in the 1980s and 1990s and, more significantly, since the 2010s. This new crop of radical right-wing parties, such as the French National Rally, the Belgian Flemish Interest, the Austrian Freedom Party, the Italian League, and the Danish People's Party, among several others, have now established themselves as significant forces in West European countries. Therefore, while the presence of the populist right within Western politics is not a new phenomenon, the current popularity of it is, having risen notably in the aftermath of the financial crisis and the Great Recession.
However, while these new-wave populist radical right parties share some of the attributes that characterized the earlier fascist movements, they generally have not taken up the explicitly racist and anti-democratic values that lie at the heart of fascism. Instead, this current wave of radical right parties shares with their forebears an ideological core that is orientated around nativism, authoritarianism, and populism.
Of these three elements, the current radical right parties tend most consistently towards populism, emphasizing the division between the people and the corrupt elite alongside the use of anti-establishment rhetoric. As well as targeting the elite (at both a national and international level), their electoral strategy involves taking a hostile stance towards immigration. This coupling of anti-establishment and anti-immigration rhetoric has been highly successful, with the Freedom Party in Austria achieving over one quarter of the vote in 1999 and in 2017 and the Swiss People's Party consistently winning a similar percentage since the early 2000s, while the French National Rally reached the second round of the presidential elections in 2002 (Jean-Marie Le Pen) and in 2017 (Marine Le Pen), and the Italian League won 17% in Italy's most recent national election. Other radical right parties, such as the Danish People's Party, Flemish Interest in Belgium, and the Party of Freedom in the Netherlands, also regularly attract more than 10% of the vote.
As a party family, these populist parties have therefore performed far better electorally than their counterparts in the green party family. However, despite this numerical success, they have generally struggled to gain influence through the exercise of power in office, because they have been seen as unpalatable coalition partners. Most of the radical right parties have therefore remained challengers, although there are notable exceptions, such as the Freedom Party in Austria and the League in Italy.

Which Challenger Parties Are Successful?
The current success of the populist parties is not historically anomalous. The existence of challenger parties is not a new historical phenomenon, and as discussed above, some of these challenger parties have even gone on to become the dominant players in our current political system. Yet while the social democrats, when challengers, faced dominant parties that had a strong support base, the new populist challengers do not face such an imposing opponent, with the current dominant parties having waned in influence over the past decades. Voter fidelity to the traditional parties has diminished as a result of large-scale societal changes, such as the decline of religiosity, the waning membership in trade unions, or the increased participation of women in the labour market. As a consequence, traditional political parties of the centre that used to dominate elections are struggling to maintain their dominance and are being forced to confront the fact that continuing to play by the old rules may no longer work. Their failure is at least in part due to the agility of the political entrepreneurs, who can challenge the dominant parties by adapting to voter desires more quickly, challenging the status quo, and distinguishing themselves from their dominant competitors without incurring significant risk.
While it is theoretically possible for dominant parties to respond by also shifting their policies to meet the new political reality, doing so is more of a gamble for these parties. Challenger parties have little to lose by innovating, as they are usually either newcomers or holding marginal positions. Even a small increase in votes would be an improvement. In contrast, dominant parties owe their position in part due to the positions they have taken on the existing issues, which voters therefore associate with them, and on the basis of which activists join the parties. Engaging in policy innovation entails the risk that voters, activists, or coalition partners will push back, perhaps driving a wedge within the membership or leading to defections [3]. Innovation may therefore cost more votes than it attracts.
Not all challenger parties have succeeded. Indeed, the vast majority are like start-up firms in the economic market: agile but destined to fail. The key question therefore is when and why do some challengers break through? Challenger parties are most likely to break through when they employ a twofold innovation strategy: (1) they introduce issues that can drive a wedge between established coalitions and within dominant parties, something we call issue entrepreneurship, and (2) they use anti-establishment rhetoric to weaken the competence advantage of established parties.
Innovation is only going to be successful when competitors cannot copy a party's innovation, with widespread imitation diminishing its electoral benefits. We therefore expect challenger parties to emphasize issues that allow for a high degree of appropriability-that is, those issues that are not easily subsumed within the dominant political dimension (the left-right dimension in West European party competition)-and that may have the potential to internally split dominant parties. It is because of this risk of creating internal factions in their party that dominant parties are likely to steer clear of them, enabling challenger parties to carve out a unique appeal to voters around this issue. Policy issues relating to European integration, immigration, and the environment have high appropriability in the European context. All three issues also have the potential to cut across the dominant dimension of political conflict in Western Europe and are not easily aligned within the left-right dimension.
While in the economic market, firms have legal means, such as copyrights and patents, to appropriate their innovation, political parties have to rely on other means to prevent imitation and to stay ahead of competitors. A first-mover advantage refers to the situation in which the first entrant on the product market gains a competitive advantage through control of resources. In the political context, a party that engages in successful political policy innovation can enjoy an effective monopoly on the issue and reap the consequent electoral benefits. Although rival parties may try to imitate a party's innovation, doing so is likely to take time, and this delay may be costly, with the lag-time giving innovators the opportunity to ' own' the issue, which will have attracted susceptible voters who may have already developed a loyalty to their brand. The risks of copying such innovation for dominant parties are even greater, with challenger parties likely to brand them as copycats, using the dominant parties' assumption of their policies to discredit them. Thus, first-movers can initially be rewarded with huge profits and a monopoly-like status.
The risks involved mean that parties with market power have little incentive to innovate. But when the innovation of challenger parties looks successful, they might just respond by copying their innovation [12]. Yet this strategy may be risky for dominant parties, as challenger parties are likely to try to protect their first-mover advantage by discrediting dominant parties through branding them as copycats. In addition to using issue entrepreneurship to mobilise new issues and to attack dominant party policy, anti-establishment groups will also seek to devalue the dominant party's 'brand' as a whole. Within such rhetoric, challenger parties will seek to condemn the ruling classes as an elite pursuing only their own self-interest. This strategy helps ensure that dominant parties find it difficult to respond to or co-opt their positional innovation and to increase the chances of challenger parties achieving their potential for growth.
The use of anti-establishment rhetoric does not necessarily mean the challenger parties are populist, however. While populists frequently use it to inculcate an anti-elitist attitude amongst the electorate, and so gain electoral support, populists also repeatedly contrast the homogenous in-group (the people) [5] with the corrupt out-group (the elite) [6]. Therefore, while there is clearly some overlap between anti-establishment and populist rhetoric, the former is more encompassing. While all populist parties are anti-establishment, not all parties that employ anti-establishment rhetoric are populist. Anti-establishment rhetoric is a more general political strategy used by challenger parties to protect their innovations.
As an illustration of this, Figure 2 uses the Chapel Hill Expert Survey to show that challenger parties are more likely to engage in anti-establishment rhetoric compared to dominant parties. In other work, we provide in-depth quantitative and qualitative evidence to describe the differences in the use of issue entrepreneurship between challenger and dominant parties based on extensive analysis of party manifestos, party expert data, as well as voter surveys [1].

What Are the Consequences for European Politics?
The successful innovations of challenger parties can have significant effects on national politics. The most obvious change that successful challenger parties can bring about is to the composition of the domestic legislatures, as challengers capture a growing share of the electorate. But there are more subtle underlying changes that occur alongside such changes to the legislative make-up. Some voters begin to prioritize different issues, in line with the issue entrepreneurship and anti-establishment strategies employed by challenger parties, while others may feel as though their views are more effectively represented as a result of the greater choice available. Challenger parties therefore bring about greater choice and may increase feelings of representation.
Yet the rise of challenger parties might also have disruptive effects. A more fragmented and polarized party system makes it more difficult to form coalitions, as well as making coalition or governing agreements less stable. This is particularly the case if polarization occurs along multiple dimensions. In part this fragmentation is a result of the greater electoral choice that challenger party innovation brings, which often mobilizes citizens to be politically engaged, because they are more likely to feel that there is a party that represents their views in fragmented and polarized systems. This means that in political systems that have greater ideological diversity, often through challenger party competition, citizens are also more likely to turn out to vote, with the broader voter participation destabilising the dominant parties and the traditional forms of government. Figure 3 illustrates this rise of fragmentation by plotting the average effective number of parties (ENP) over time in European party systems. The ENP measure captures an adjusted number of political parties in a country's party system, weighted by their relative strength in seat share [14], and Figure 3 clearly shows that fragmentation has increased from around 3.5 effective parties in the immediate postwar period to above 4.5 today. Much of this increase is due to the successes of challenger parties.
As these challenger parties succeed, the fracturing of the political system may lead to less effective government and, in turn, to lower satisfaction with the political system. This fracturing is due to the fact that challenger parties often struggle to enter into coalition, with the compromises necessary to do so requiring them to fudge their anti-establishment identity, which has been a core part of their electoral success. As such, vulnerable governments tend to result from such electoral outcomes, and they then struggle to deliver their policy promises, exemplifying the tension that exists between representative and responsible government.
What does the rise of challenger parties mean for the future of different European party systems? Of course, no one can predict what will happen in European party competition, as there are simply too many unknowns in politics. What we can do is outline three possible scenarios for the future:

Fragmentation
Market fragmentation in economics denotes the idea that markets are diverse and that with time they are likely to break up into distinct groups of customers, or different fragments. An innovation brought onto the market by a disruptive entrepreneur will initially solve the needs of most early adopters, yet over time customers will become accustomed with the new product. As more and more customers adopt the product, the need for more unique product features and benefits arises. As the novelty of the initial innovation wears off, depending on the loyalty that customers have developed towards the brand, they will either stay put or move on to the next big thing.
In the political market we are witnessing a similar process, as shown in Figure 3. Over the last few decades, voters have become less attached to the dominant parties and are more volatile in their choice of which party to support. Voters resemble picky consumers who are willing to substitute one product over another when they think the quality is higher. Challenger parties have used this window of opportunity to innovate politically, and some have been electorally successful. The political marketplace in virtually all Western European countries has become more fragmented in recent years in the sense that more political parties compete and a larger share of them attract a significant voter following.
One of the clearest examples of such a fragmentation scenario is the Netherlands, with Dutch politics having seen some of the most electorally successful challenger parties to date. While in the 1960s and 1970s Dutch politics witnessed the birth of a set of challenger parties on the left of the political spectrum, since the early 2000s the rise of challengers has been primarily on the right.
The first right-wing challenger party emerged in the aftermath of 9/11, with the political entrepreneur Pim Fortuyn and his eponymous party, the List Pim Fortuyn (PFL), shocking the Dutch political establishment with outspoken rhetoric against immigration and Islam. While the PFL collapsed after Fortuyn's death and a brief, chaotic period in office, their success presaged the future volatility of Dutch politics. In 2006, Dutch voters moved to Geert Wilder's Party for Freedom, which sought to trump Fortuyn's legacy by hardening anti-immigration rhetoric. After a decade as a leading challenger party, Wilders' innovation and appeal started to wane, and it was supplanted by Thierry Baudet and his Forum for Democracy, who entered the Dutch Parliament in 2016. The need to differentiate himself from Wilders meant that Baudet had to move even further to the right, adopting ultra hard-line conservative views that put forward a 'Dutch First' message with rhetoric that critiqued feminism and the liberal Dutch establishment, claiming that both have served to undermine Dutch civilisation. After the initial innovation by the first successful far right challenger party on the Dutch political market wore off, the subsequent challenger parties have needed to add new elements, such as a stronger anti-European focus and a more encompassing anti-establishment rhetoric, to be successful. Fragmentation has increased as a result. This has meant that forming stable governments that can pass laws by commanding a majority in both parliamentary chambers in the Dutch context has become increasingly difficult. While the Dutch case is perhaps one of the clearest examples of fragmentation and its consequences, we are witnessing similar trends in many other countries in Western Europe.

Replacement
While fragmentation seems a very likely future scenario for party systems in Europe, there are other possible scenarios. One is replacement. The replacement scenario comes close to the notion of ' creative destruction' developed by the Austrian economist Joseph Schumpeter [15]. It refers to the idea that firms that once revolutionized product markets through innovation are themselves replaced by rivals who have launched new products and/or improved on the design or delivery of existing ones. In recent years we have witnessed the dramatic decline of some dominant parties as they have been usurped by their challengers. One of the clearest examples of replacement can be found in Greece, where the once dominant social democratic party, the Panhellenic Socialist Movement, PASOK, collapsed and was replaced by its challenger, Syriza.
PASOK was part of the coalition government responsible for the unprecedented austerity measures taken in response to the sovereign-debt crisis that hit Greece after the Great Recession. From 2008 to 2015, the party went from being the largest party in the Greek parliament, winning over 40% of the popular vote, to being the smallest party, receiving less than 5% in January 2015. It was ultimately forced to merge with a new party, Movement for Change, in 2018.
As PASOK declined, Syriza, the left-wing populist challenger, rose, becoming the leading party of the Greek left-wing during the country's sovereign-debt crisis. Syriza was not a new challenger party, having been formed in 2004, but 2012 saw their first meaningful electoral success: they became the main party of the opposition, with 36% of the vote. This rise continued in 2015's snap election, when they became the largest party, holding 149 of the 300 seats and going into coalition government with a right-wing populist party, the Independent Greeks. In both elections, Syriza's antiausterity and anti-corruption platform was amalgamated with an anti-establishment perspective (seen most visibly in their opposition to the EU), allowing them to take advantage of the political upheaval and win power, supplanting their dominant counterparts.
The Greek experience demonstrates how successful challengers can replace dominant parties, but also how difficult it is for them to do so. To replace a dominant party, challengers need significant external events, like a deep economic recession, to tarnish the dominant party's brand to such an extent that it loses all credibility and much voter support. To win and retain power, they also need to successfully navigate the transition, which requires them to actually create and implement policy, rather than simply levying criticism from the side-lines. As these challenger parties try to adapt to their shift to insider status, the changes often spark internal power struggles over the direction and strategy of the party, creating long-term difficulties for the sustainability of the challenger party as a party of government.

Reinvention
A third and final future scenario is reinvention, with dominant parties reinventing themselves around the issues they already own. Much has been made in Europe about the decline of traditional political powerhouses. Secularization and the shrinking size of the working class has led to predictions of the inescapable decline of Social Democratic and Christian democratic parties. While structural changes are without a doubt important, we argue that parties are not powerless in the face of them and that they have strategies they can use to respond to a changing electoral landscape.
There is evidence of this in some countries, with formerly dominant parties revived and returning to power, as recently occurred in Spain. The 2019 Spanish parliamentary election saw the rise of challenger parties, with VOX, a hard-right populist party, breaking through. But it also witnessed the revival of the Spanish Socialist Workers' Party (PSOE), Spain's oldest active party, led by Pedro Sánchez. In 2018, the PSOE only had 84 of the 350 seats in the Spanish Parliament, with the conservative People's Party, led by Mariano Rajoy, in power. Corruption charges were levied against Rajoy's government, resulting in a vote of no confidence passed against his administration and Pedro Sánchez becoming prime minister in June. Sánchez governed firmly on the left, with his ambitions focused on the creation of jobs, greater redistribution of wealth, and remedying social injustices.
Such left-wing ambitions resulted in a number of Catalan parties withdrawing their support for the PSOE's budget in February 2019 and in Sánchez calling a snap election for April 28. During the campaign, the socialists stuck to their left-wing narrative, building upon their historical legacy as the defenders of Spanish democracy. They coordinated this rhetoric with attacks upon VOX and other right-wing populist parties, claiming that they evoked the 'spectre of Francoism'. The return to the firmly left-wing economic narrative by the PSOE made it difficult for a populist challenger party on the left, Podemos, to ride to power upon a wave of anti-establishment sentiment. The result was that the two left-wing parties, dominant and challenger, now govern in coalition.
The social democratic recovery of the PSOE illustrates how dominant parties can regain market share and how they can use the electoral threat posed by challengers to reinvent their party. Only time will tell how long Sánchez's success will last and whether social democratic or Christian democratic parties in other European countries can follow suit and revive their electoral fortunes to pave their way to back to political office.
Each of these future scenarios is likely to become political reality in some European party systems over the next decades. Fragmentation is perhaps the one already most visible in parliaments across Europe. Populist parties are growing, carving off voters from the dominant parties and occupying seats in the legislatures. Even in party systems with relatively high levels of two-party concentration, such as Spain's, we are now witnessing high levels of fragmentation and challenger party success. Replacement is still a relatively rare phenomenon in post-war Western European party politics, but it is likely to become more common as challenger parties enter power and crowd out erstwhile dominant parties. But in cases where the brand of dominant parties has not been tarnished beyond repair, there is also plenty of scope for reinvention.