The increasing prominence of anti-democratic politics in Europe strikes even the most optimistic observers. The recent illiberal turn of Hungary and Poland has puzzled researchers and pundits alike. Yet, the strength of illiberalism varies across the region with some countries like the Czech Republic retaining high democratic quality. What explains this divergence? What are the unique factors behind the rise of illiberalism in Hungary and Poland and the lack thereof in the Czech Republic? Existing research agendas, the actor oriented transition theory, the institutionalist scholarship and the varieties of capitalism approach failed to foresee and explain this phenomenon. I propose a new political economic framework for understanding the rise of illiberalism in CEE countries as a consequence of the exhaustion of the developmental model followed prior to the global financial crisis. My hypothesis is that the varying strength of illiberalism might be explained by the differences in the demobilization and rightward turn of the working middle classes and by the differences in the polarization of the economic elite. I propose a multidisciplinary methodological approach by a) developing a municipality level dataset to analyse how the vulnerability of the middle class lead to the collapse of the Left; b) creating a relational database to carry out a network analysis of the change in the connections among the members of the political and economic elite; and c) by providing qualitative case studies to underpin the causal narrative. Understanding de-democratization in the CEE region will help researchers in reformulating the dominant theories of transition in semi-periphery countries as well as provide lessons about socially and democratically sustainable transformations throughout the world. The project directly contributes to the goals of the ISRF by promoting a new political economic framework and by developing interdisciplinary expertise to solve the real world social problem of rising illiberalism.