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As a cradle-to-grave welfare state, Sweden has long been the northern light of liberals, the pole star of congressional progressives. And yet when the Social Democrats cast the recent election as a choice between tax breaks for the rich and more welfare, they were handed their worst electoral showing since 1914. By electing the four-party right-of-center coalition, Alliance for Sweden, voters opted for tax cuts. This unexpected Swedish victory is just the latest in an unprecedented run of success worldwide for fiscally conservative parties, beginning after the Greek debt crisis in April.

Since then, there have been eight elections in the developed world, six of which have been won by the right. In Central Europe, voters embraced center-right parties that pledged to reduce spending. The Czech Republic's TOP 09 party fared well in May elections, as did Slovakia's free-market Freedom and Solidarity party a month later. Results from Western Europe are even more telling, where in June Dutch voters gave their most fiscally conservative party, the People's Party for Freedom and Democracy, its first ever victory.

Despite particular differences, a few common themes emerge from this record, themes with which American conservatives are certainly familiar but which they might do well to internalize in the weeks ahead.

First, cap and trade has proved to be a successful foil. For instance, in Australia Liberal leader Tony Abbott argued that cap and trade would hurt mining interests, an approach that enabled the coalition he led to pick up votes and seats in working-class, especially mining, districts. In the Western Sydney suburbs, Abbot told working-class voters it would significantly increase their electricity bills. Even as green parties increased their share of the Australian vote, the Labor party shunned cap and trade and instead pledged multiparty talks on curbing greenhouse gas emissions.

Second, the Tea Party phenomenon is part of a surging populism worldwide, and traditional parties everywhere are feeling the crunch. The most attention has gone to anti-immigrant parties, like Geert Wilders's Freedom party, which nearly tripled its representation in the Dutch parliament, or the far-right Sweden Democrats, which entered parliament for the first time. But there is also the populism that issues from frustration with an unresponsive, and fiscally irresponsible, ruling class. Accordingly, new parties pushing fiscal conservatism form the backbone of the Czech and Slovak governments. In the United Kingdom both currents did better than they have before. Both the United Kingdom Independence party, a fiscally conservative party, and the anti-immigrant British National party, siphoned votes away from Cameron.

Nonetheless, despite voters' fiscal conservatism, they do not want to uproot entirely the welfare state. Australia's Abbott started his campaign by pledging not to reintroduce WorkChoices, a law deregulating labor markets passed by the last Liberal prime minister, John Howard, which proved so unpopular that voters toppled Howard's government despite a booming economy. In Sweden, Prime Minister Fredrik Reinfeldt's right-wing New Moderates party has successfully argued that lowering taxes, increasing the number of Swedes at work, and decreasing those on the welfare rolls is the best way to pay for Sweden's social model.

Polls show that each of these trends is in evidence on our shores. Voters say they want smaller government with fewer services, and independents are especially concerned with the deficit. Cap and trade may be popular in San Francisco and on college campuses, but Democrats who backed the bill in districts dependent upon fossil fuels for their electricity--or for their jobs--are paying the price. And anger at establishment leaders on both sides of the aisle has fueled the Tea Party, suggesting that the "plague on both your houses" sentiment is deep and widespread. Still, antigovernment attitudes don't seem to affect the pillars of the American welfare state: Even ardent constitutional conservatives like Sharron Angle promise to protect Social Security and Medicare.

These trends sound both optimistic and cautionary notes for GOP leaders. Republicans can ride the wave of populism and fiscal conservatism to victory now, but they will need to reconcile Tea Party populism with Americans' attraction to the welfare state if they are to simultaneously govern and forestall a third party effort in 2012. Republican leaders might look to their foreign counterparts for lessons in how to manage this challenge now, before the challenge manages them.

Henry Olsen is a vice president and the director of the National Research Initiative at AEI.

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