ABSTRACT
Populism as a political phenomenon is accompanied by the rise of illiberal democracy. The latter challenges the existing democratisation conditionality embedded in the Washington Consensus. In contrast to the conditionality of democratisation, democratically elected governments, often those that have been re-elected, are habitually ignoring constitutional limitations on their power and denying the fundamental rights and freedoms to their society, which in turn has a potential impact on how they perceive and distribute or donate foreign aid. In this chapter, the liberal and illiberal democracy basic political characteristics are juxtaposed and the rationale for the rise of illiberal democracy is examined. Subsequently, the discussion turns to challenges of illiberal democracy in a context of foreign aid and the impact of illiberal democracy on multilateral development banks, bilateral aid agencies and recipients is articulated.
