Consider This: 2024 Elections

Political risk is global in 2024: Franklin Templeton Institute’s Kim Catechis highlights key elections to watch across the world in the coming year.

What do this year’s global elections mean for investors?

International investors understand that domestic politics drive policy direction in any country. Elections are viewed as sometimes-risky periods, as we wait to see which political leader voters chose and assess the implications of their stated policy objectives. In any case, even narrow elections have consequences, although the impact on investors is sometimes not immediately obvious.

More than 50 countries are expected to hold national elections in 2024. That number includes presidential and legislative elections, but also local government elections that are national in nature and will impact domestic politics, potentially facilitating or obstructing the government in the pursuit of their objectives.

Exhibit 1: Political Risk Is Global in 2024

Political Risk Is Global in 2024

Some of these elections can be categorized as “free and fair,” meaning that citizens can stand for election and campaign fairly, allowing the voters to choose their preferred candidate on an even playing field. In authoritarian countries, like Russia and Venezuela, citizens can vote, but the contest is neither free nor fair, with opposition leaders in jail and campaigning, freedom of speech and association all severely restricted. Finally, we have a third classification, hybrid democracies, which are functioning democracies with weaknesses in their electoral systems and their governance.