Progressive Governments Can Run an Economy Well

The Myth That Conservatives Manage Economies Better

For decades, a single assumption has shaped electoral politics across the democratic world: that parties of the center-left may be trusted with compassion, but not with the balance sheet. Voters have been told, election after election, that progressive governments spend too freely, tax too heavily, and eventually preside over inflation, capital flight, and fiscal crisis. Conservative parties, by contrast, have marketed themselves as the sober custodians of growth and stability — the adults in the room when the markets get nervous.

That assumption has never rested on especially strong evidence. It has persisted more through repetition than through proof. And in 2026, the empirical record has finally caught up with the rhetoric. As economists Darío Durigan and Carlos Cuerpo argued in Project Syndicate this September, the governing experiences of Brazil and Spain demonstrate that progressive administrations can combine fiscal discipline, economic growth, and social development — simultaneously, not sequentially.

The claim is not that ideology guarantees outcomes. It is narrower and more defensible: the supposed conservative advantage on economic stewardship is a myth, and the past several years of governance in two very different economies have exposed it.

Brazil and Spain as Case Studies in Progressive Governance

Brazil and Spain make an instructive pair precisely because they share so little. One is a large emerging economy in the Global South, exposed to commodity cycles, currency volatility, and the shifting appetites of global capital. The other is a mature European Union member bound by eurozone fiscal rules, an independent central bank, and the constraints of a common monetary policy.

If a progressive economic model can work in both settings at once, the argument that it only functions under unusually favorable conditions weakens considerably. That is what makes the comparison more than a rhetorical device. Brazil tests whether progressive governance can survive the turbulence of emerging-market capitalism. Spain tests whether it can survive the austerity-minded architecture of Brussels and Frankfurt.

According to Durigan and Cuerpo, both governments have pursued the same basic formula: fiscal responsibility paired with growth-oriented investment and a deliberate focus on social development. The result, they write, has been measurable improvement in millions of people's lives — and a direct refutation of the hoary belief that conservatives are the better economic managers.

How Progressive Policies Delivered Growth

Start with the fiscal dimension, because that is where the conservative critique has the most surface plausibility. Progressive governments are said to borrow recklessly and inflate deficits. Yet the record in Brazil and Spain, as summarized in the Project Syndicate analysis, points in the opposite direction: both administrations have maintained fiscal responsibility while still funding growth and social priorities. That combination — discipline without austerity, investment without profligacy — is the policy mix that critics have long insisted is impossible.

On growth, the evidence is equally inconvenient for the old orthodoxy. The two economies have expanded under progressive leadership, and the relevant international institutions have taken note. The International Monetary Fund and the World Bank have both tracked Brazil's growth trajectory and its poverty-reduction record under the current administration, and the direction of travel has been upward on both counts. Eurostat and Spain's Instituto Nacional de Estadística have documented the Spanish labor market's improvement and the government's progress on deficit reduction. These are not partisan sources; they are the standard reference points that any serious analyst would consult.

This is where intellectual honesty demands a caveat. Brazil has benefited from global commodity tailwinds that no government in Brasília engineered. Spain has benefited from a broader European recovery and from post-pandemic tourism demand that no government in Madrid created. Economic outcomes are always overdetermined, and any claim that a single administration "caused" a growth cycle should be treated with suspicion.

But the tailwind argument proves less than its proponents imagine. Commodity booms have washed over Brazil many times without producing durable poverty reduction; the question is what a government does with the revenue. European recoveries have lifted many economies without producing Spain's particular combination of employment gains and deficit consolidation. Tailwinds are opportunities, not achievements. The policy choices determine whether an opportunity becomes a legacy or evaporates. Economists at CEPAL (ECLAC), the UN's regional commission for Latin America, have consistently emphasized that commodity windfalls only translate into development when governments deliberately channel them — and that is precisely what the Brazilian case illustrates. Analysts at the Bruegel think tank have made a parallel point about Spain: the fiscal and labor-market trajectory reflects policy design, not merely cyclical luck.

The uncomfortable conclusion for the right is that progressive governments did not merely inherit good conditions. They converted them.

Millions of Lives Improved: The Human Dividend

Macroeconomic aggregates can be gamed, spun, and selectively cited. What is harder to dispute is the effect on households. The Project Syndicate analysis is explicit that progressive governance in Brazil and Spain has improved the lives of millions of people — through social development, poverty reduction in the Brazilian case, and employment gains in the Spanish one.

Spain matters here for a specific reason. Its economy is often described as a laboratory for the claim that generous social policy and job creation are incompatible. The evidence from the current government contradicts that claim. Employment has risen while the fiscal deficit has fallen — two outcomes that austerity advocates insisted could not be pursued at the same time. If that were true, Spain's experience would be an anomaly. It is better understood as a demonstration.

Brazil tells a related story from a different starting point. Poverty reduction at scale requires growth that reaches people who are far from the centers of capital, and that is a distributional achievement as much as a macroeconomic one. The current administration has delivered it while maintaining fiscal responsibility — which is to say, it has refused the trade-off that conservative orthodoxy treats as unavoidable.

The human dividend, in other words, is not a consolation prize for slower growth. It is the point. An economic model that produces growth without improving lives has failed at the only test that ultimately matters to citizens.

Why This Model Matters Now

Timing is not incidental to this story. The Brazilian and Spanish experiences are arriving at a moment when progressive governments globally are on the defensive, pressured by inflation fatigue, immigration politics, and a resurgent right that campaigns on the promise of competent economic management. Into that environment comes a body of evidence suggesting the right's central selling point is counterfeit.

This matters beyond two countries. If the conservative advantage on economic credibility is a myth rather than a demonstrated fact, then the political choices available to voters widen considerably. Progressive parties no longer need to apologize for their economic record; they can point to it. And they can do so without abandoning fiscal credibility, which has always been the strongest weapon in the conservative arsenal.

There is also a geopolitical dimension. The 2026 political landscape features rising protectionism, pressure on multilateral institutions, and a broad retreat from the post-2008 consensus that markets self-correct. In that environment, a working alternative model is not merely an academic curiosity. It is a practical resource — proof that a different policy mix can deliver.

Conclusion: A Replicable Blueprint for the Left

What Brazil and Spain offer is not a miracle and not a template to be copied mechanically. Their economies differ too much for that, and the specific instruments each government used are shaped by local constraints. What they offer instead is something more durable: a demonstration that progressive economic policy can deliver growth, fiscal responsibility, and social development at the same time.

The old bargain — accept inequality and stagnation in exchange for stability — was always a bad deal. Brazil and Spain have shown it was never a necessary one. For progressive governments elsewhere searching for a credible economic story, the evidence is already written. The task now is to run on it.

Source: Project Syndicate