October 2026, What's Happening In the Movement

The Greatest Risk for Business Is Inaction

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By Hardy Merriman and Maria J. Stephan

When business leaders hear concerns about democratic backsliding, they tend to dismiss it as alarmist. But the facts suggest that many in the business community aren’t scared enough—or ready to act when they need to. If the United States stays on its current track, the losses for business will be significant. The greatest peril companies face today is not the risk of speaking up—it is the risk of staying silent. Here is what the research tells us about where we are, the stakes for business, and why it is urgent to change course.

This is measurement, not opinion

The United States is experiencing the fastest rate of democratic backsliding seen anywhere in the world in recent decades. That conclusion is shared by numerous analysts, including the chief data reporter of the Financial Times, John Burn-Murdoch, who reached the same finding in a column last January.

Pointing out that democracy is in sharp decline is not a mere political opinion. Researchers measure democracy using rigorous criteria—including the presence of fair electoral competition, respect for civil and political rights, the exercise of judicial and legislative checks on the executive, and the degree of free and independent media. In aggregate, the findings of democratic backsliding are consistent and clear. Consider the Varieties of Democracy Institute’s (V-Dem) Liberal Democracy Index, which tracks the US from 1900 through 2025. The decline the US experienced in 2025 is unprecedented for any single year in our country over the past century.

Moreover, once backsliding starts, it can continue for years, as it did in Venezuela, Hungary, India, and Turkey. But other countries such as Brazil, Poland, and South Korea began to slide and then sharply reversed course. Which path the US takes depends on how—and how quickly—society responds.  The business sector plays a crucial role in determining this outcome.

Why backsliding catches us off guard

In the face of backsliding, many are tempted to respond with denial, confusion, or the belief that it is someone else’s job to fix the problem. That is in part because democratic backsliding is rare. People living in democracies are accustomed to the legal system, elections, and political norms serving as guardrails that keep competition and behavior within a predictable range. Looking at over a century of data, democratic governments on average had only a 2–3% chance of starting a backsliding episode in any given year. 

Yet in those rare cases when democracy starts backsliding, responding with denial, confusion, or a false belief that old guardrails will automatically start working again can be disastrous. Inaction and disorientation creates openings for authoritarians to continue attacking democracy and to rapidly try to consolidate their rule. Over the last two decades, authoritarians have also drawn lessons from each other internationally about how to do this. Too often, they succeed. Research finds that once backsliding starts, democracies break down into authoritarian rule about 70% of the time.

The result is usually an “electoral authoritarian” regime. Elections continue, but corruption is rampant, the rule of law is compromised, and the playing field is so tilted that restoring democracy takes massive organizing. No headline announces the moment that a democracy breaks down into an electoral authoritarian regime. Most people realize it only after the damage is done.

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What’s at stake for business

If the US continues to slide toward authoritarian rule, businesses will feel direct impacts in three ways.

1. A weaker economy and society

Democracies outperform authoritarian governments on growth, economic management, anti-corruption, public health, education, security, and other areas. That is why rising authoritarianism should be treated as a systemic risk. Evidence that directly relates to business is clear:

  • Democracies average 1.1% higher annual GDP per capita growth than autocracies (V-Dem), and autocracies are about three times more likely to suffer an economic crisis (V-Dem).
  • A transition to democracy leads to about 20% higher GDP per capita over 25 years (Acemoglu et al.).
  • When democracies elect populist leaders, GDP per capita runs about 10% below its expected path over 15 years, regardless of whether the populist leader is on the right or the left (Funke, Schularick and Trebesch).
  • Democracies borrow more cheaply (Beaulieu, Cox and Saiegh) and publish more reliable data (V-Dem); autocracies overstate GDP growth by 0.7–1.5 percentage points a year (Martinez).
  • Authoritarian institutional risk is fundamentally different from traditional political risk. When institutional checks degrade across multiple jurisdictions—meaning courts, central banks, and regulatory bodies lose their independence simultaneously—the resulting risk is systemic, spanning the entire financial system. (Emerson)

2. Direct business risk

As checks and balances fall and loyalty is prized over competence, arbitrary and damaging policy decisions on questionable legal grounds become a feature of governance. Companies are told to quietly pay the price.

When companies are seen as enabling the regime, they can also face backlash at home. For example:

Companies further face the risk of lost international customers. For example, European governments are currently spending hundreds of billions of dollars to replace American-made satellite networks, video conferencing, and messaging apps. And at the NATO summit this summer, Boeing lost out on a $4.5 billion contract for surveillance aircraft to Saab. A growing number of customers will not want to rely on corporations based in a non-democratic country. 

If backsliding continues, businesses should expect more of all of this: lost customers, more boycotts, and more pressure from workers, shareholders, and foreign governments.

3. Personal risk for business leaders

Business leaders probably don’t think of themselves as taking orders from others, but an authoritarian sees things very differently. He believes and increasingly behaves like every executive in the country personally works for him. The more he gets away with it, the more he is emboldened. As an authoritarian’s grip tightens, executives face mounting pressure to take legal, financial, and ethical risks to stay in his good graces. They also take the fall when things go wrong. Every business is expendable to an unchecked leader whose only durable belief is his own power. An authoritarian may impose tariffs, take stakes in private companies, or threaten executives personally, and then later reverse course whenever it suits him.

There is no such thing as a sustainable deal with an authoritarian. Extortion is how he relates to business. Each time a company pays up, he learns his abuse has few limits, and the price goes up.

Act 2 is not inevitable

Many businesses don’t yet realize that we are only in Act 1 of a play, and that unless we change course, Act 2 will be far harder for them. The time to act is now. 

As authoritarians dismantle institutions and engage in corruption, they often become unpopular, polling at around 35% within a few years. Knowing they would lose a fair election—and that losing power means accountability awaits them—authoritarians tend to double down.

Think of the election itself as Game 1. Because they will lose Game 1, authoritarians switch to Game 2: manipulating the election rules and undermining the ability to enforce the results. 

Once an authoritarian starts banking on winning Game 2, pro-democracy forces must react swiftly. The most common mistake that they make is believing that a clear electoral margin in Game 1 will make Game 2 irrelevant. It almost never does. Big margins make subversion harder, but authoritarians will still try, and succeed, in brazen attempts if society is not organized enough to resist.

However, authoritarians can be forced to accept losing election results. Elections are often the very mechanism by which backsliding is stopped or reversed. About half of democracies that break down into authoritarian rule later return to democracy, in what analysts call a “democratic U-turn.” These U-turns usually run through institutions like elections and courts, but what drives them is anything but routine.

The key ingredient is societal mobilization. One study of 35 cases of democratic backsliding between 1991 and 2021 found that:

  • When there is little popular mobilization, the predicted probability that democratic institutions will stop backsliding is only 7.5%.
  • When there is significant popular mobilization alongside institutional mechanisms, the predicted probability that democratic backsliding will stop rises to nearly 52%.
  • When the business sector shifts from cooperating with the authoritarian to withdrawing support and standing for democracy and the rule of law, the predicted probability of stopping backsliding rises to nearly 80%.

Mobilization will look different for different sectors. The business sector doesn’t need to lead the way. But when businesses move, it matters enormously.

What new research tells us about business

The Horizons Project supports research by scholars including Jonathan Pinckney of the University of Texas-Dallas on how activating key sectors of society (also known as pillars of support) helps to reverse democratic backsliding. At Horizons’ request, Jonathan and his team took a closer look at the business pillar. Their research is at an early stage and shows patterns rather than proof of cause and effect, but the preliminary results are striking. 

The brief version is: data shows that the business sector has real power, but companies tend to use that power late, alone, and only once they have been directly targeted. Specific findings include:

  • When business spoke out, authoritarian and backsliding regimes were more likely to stop. Authoritarian and backsliding regimes fall more than twice as often in years when business is openly breaking with the regime as in years when business stays silent.
  • When business spoke out, authoritarian and backsliding regimes tended to end sooner. Regimes where business speaks out last about nine years on average, compared with about twelve years where it doesn’t.
  • Companies usually wait until they are targeted. Companies tend to break with a regime only after the state comes after them directly. Even then, the break is usually limited to the specific companies targeted. It is relatively rare for the business community to move as a group.
  • Business rarely goes first. Shifts in business behavior tend to follow, or happen alongside, shifts by other groups such as labor, faith communities, or the legal profession. That reflects the generally cautious posture of business elites.
  • Relationships are important drivers of behavior. Business leaders with social ties to opposition or pro-democracy movements are around three times more likely to break with the regime, depending on the model and sample.

Other research helps explain why business holds back. A 2025 study by Semuhi Sinanoglu of 76 countries finds that the more favors business leaders trade with an autocrat, the less able they are to break with him; in the most entangled cases, the odds of business opposition drop by more than half. Every quiet accommodation makes the next act of courage harder.

The lessons here are clear. Business leaders should move earlier and together, before their own company becomes a target or collateral damage from authoritarian rule. Collective action coordinated across multiple firms protects business interests and makes government retaliation economically and politically costly.  Pro-democracy movements should build relationships with business leaders now, because those ties make it far more likely that business will stand with them when it counts.

What standing together looks like: Brazil, and our own past

In 2022, when Brazilian President Jair Bolsonaro threatened the Supreme Court and attacked the legitimacy of the electoral system, Brazilian society responded together. As Steven Levitsky and Daniel Ziblatt recounted in the New York Times, the University of São Paulo Law School wrote a public letter in defense of democracy, declaring there was “no room for authoritarian backsliding” and it was signed by a former president, nine retired Supreme Court justices, and the heads of many of Brazil’s largest banks and businesses. 

The following month, the country’s leading industry federation—the São Paulo Federation of Industries—led on a second statement calling democracy “essential” to Brazil’s future and affirming an “unwavering commitment to the institutions and fundamental principles of the Rule of Law.” It was signed by more than 100 organizations, including Brazil’s Federation of Banks and Chamber of Commerce. 

Catholic bishops issued a third statement declaring that neutrality was not an option in the face of a choice between authoritarianism and democracy. 

Brazilians understood that standing together, and resisting early, was the best chance to stop the slide.

The US also has our own precedents. On Election Day 2020, the AFL-CIO, the US Chamber of Commerce, the National Association of Evangelicals, and the National African American Clergy Network issued a joint statement. They called for the democratic process to proceed without violence or intimidation, for every eligible voter to be able to cast a ballot, and for every ballot to be counted consistent with the law, so that the American people would determine the outcome. (Horizons Project has documented how that unlikely alliance came together.)

Today the US faces similar circumstances, with an administration laying the groundwork to interfere with or deny election results. If businesses, alongside labor, faith, and legal communities, signal now that they will stand for democracy, we can still avert the worst outcomes.

What businesses can do

Acting early, acting together, and building relationships before a crisis hits are the foundation of effective response. Some actions that businesses can take (as outlined in the Common Courage Toolkit) include signaling support for democracy, organizing other businesses to join them, opposing authoritarian measures, denying goods and services to those who engage in abuse, and lending resources to pro-democracy movements. Below are some examples of American businesses and business associations already doing this work. More efforts are needed.

  • Speak out together, and early. Trade associations and chambers of commerce give companies cover to act as a group. For example, a Los Angeles chamber of commerce leader came out publicly in June 2025 to say that the ICE raids, protests, and tariffs are bad for business. The Portland, Oregon Metro Chamber signed a joint letter urging the administration to refrain from deploying federal troops to their city. And a coalition of more than 30 business and civic leaders denounced the federal government’s aggressive deportation campaign in Chicago as bad for the local economy.

    After behind-the-scenes engagement with the Minnesota Chamber of Commerce, more than 60 CEOs, including the heads of Target, General Mills, and 3M, jointly called for an immediate de-escalation, and other executives followed. The letter stopped short of condemning ICE, but it moved big business from silence toward the middle, and the fact that it was a collective statement had a powerful impact. Yet we hope a lesson learned by large businesses is that the letter could have come earlier—before so much damage was done. Signaling resolve ahead of time is important, as when more than 50 Arizona business leaders signed a letter in July calling election legitimacy an economic imperative, and on Sept. 29, 2026 The CEO Center of The Conference Board called on business leaders to support trusted elections.
  • Refuse to capitulate, and stand with those who are targeted. When the administration targeted major law firms in 2025, many cut deals. But four firms sued, and all four won. After lawyer Rachel Cohen resigned from Skadden over its concessions, more than 500 law firms signed an amicus brief supporting Perkins Coie in its challenge to President Trump’s executive order targeting the firm, exactly the collective response the research says business rarely produces.
  • Name the costs to your industry. Mario Guerrero, head of the South Texas Builders Association and a three-time Trump voter, spoke out against immigration enforcement and tariffs once they threatened his members’ businesses. First movers like Guerrero make it easier for others to follow. In September 2026, three organizations representing thousands of ranchers in Texas, Oklahoma and Kansas issued a joint statement warning operations by ICE are disrupting the agricultural community and will make beef prices spike again.
  • Refuse to serve abusers. A clear example of this in Minneapolis, St. Paul and beyond, where businesses have hung signs that banned ICE officers from entering their premises. After organizers in Minneapolis met with hotel managers and held noise demonstrations outside hotels housing ICE agents during Operation Metro Surge in January 2026, one Hilton-brand hotel also publicly refused to serve ICE agents and others asked agents to leave. Hilton national quickly cut ties with that hotel under administration pressure, a reminder of how important it is to support those who take a stand.
  • Lend resources to the movement. Small businesses are directly harmed by authoritarian overreach, deeply embedded in their communities, and among the most trusted messengers in American life. Accordingly, many small businesses in Minnesota’s Twin Cities closed for the January 23 day of “No Work, No School, No Shopping,” offered space and other support to organizers, and posted signs declaring that ICE is not allowed inside.
  • Prepare now. Agree with peers on what you will say and do if election results are contested. Protect those who take a stand to uphold democracy. Align political spending with democratic values, and sustain those commitments; many companies that paused PAC donations after January 6 quietly resumed them.

Many of the above actions will be more powerful with advance conversations and planning. For example, in Minneapolis and St. Paul, people within and beyond the business community spent months engaging businesses around shared democratic values. A combination of pressure and engagement works best. For pro-democracy movements, that means building ties with business leaders now, celebrating companies that act with courage, and standing by them when the regime pushes back.

There will be no middle ground

If prevention fails and an administration tries to deny the results after an election, there will be no neutral position left. An administration declaring a state of emergency beyond its authority, invoking the Insurrection Act for political purposes, disrupting vote counting and impounding ballots, or refusing to swear in winning candidates is a fast-moving crisis. If that happens, silence from business or any other institution will be understood by many customers, workers, shareholders, and others as enabling authoritarianism at the most critical point.

Yet the opposite is also true. In that same moment, businesses will have the power to swing things back toward democracy if they move fast to speak out, use their leverage, and stand together.

Taking that stand is, first and foremost, a stand for our country. But even judged purely as a business decision, the case is clear. Companies that stand for democracy will fare far better than those that wait and hope the storm passes. The time to signal where you stand is now, before Act 2 begins.

Hardy Merriman’s work has focused on pro-democracy movements fighting authoritarian governments and democratic backsliding around the world for over 20 years. He is former president of the International Center on Nonviolent Conflict (ICNC), led the Fostering a Fourth Democratic Wave project as a nonresident senior fellow at the Atlantic Council, and was an adjunct lecturer at the Fletcher School of Law and Diplomacy. He is currently an independent consultant, presents widely, and works with numerous groups including Business Response to Authoritarian Threats (an initiative of the Horizons Project). His most recent publication is Authoritarianism is a Systemic Risk: Implications of Rising Autocracy on Domestic and Global Affairs (2026).  

Dr. Maria J. Stephan is the Co-lead & Chief Organizer at the Horizons Project, an initiative focused on strengthening connections and collective action among US pro-democracy movements and sectors. Maria is an award-winning author and organizer whose work has focused on the role of nonviolent movements advancing human rights, democracy, and peace. She co-wrote (with Erica Chenoweth) Why Civil Resistance Works: The Strategic Logic of Nonviolent Conflict, which received the American Political Science Association’s award for the best book published in political science in 2012, and the Grawemeyer Award for Ideas Improving World Order.   

This article was published October 13, 2026, at HORIZONS Project.

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