Limitations of Democracy

The axiom that standard electoral democracy is the absolute best form of Government has always gone unchallenged in India. Early thinkers actually understood some of the limitations of democracy and considered it to be a compromise. It wasn’t the best in an absolute sense but the best among all other alternatives available at that time.

While the limitations are quite apparent to those living in non-democratic or partially free societies, they usually go unnoticed by people living inside democracies. Their own media and intellectuals consider it to be a hard won privilege that is beyond any questioning. Focus is usually directed on change within existing governments or change of governments instead of changing the structure of institutions within which these governments function.

Instead of doing the same, I want to take a critical look at this institution and try to list down all the problems I see. Most of these problems are due to bad incentives and behavioral biases among people.

This post won’t end in a call for a benevolent dictatorship to take the place of democracy, of course. I’m aware of the strengths of democracy like its self stabilizing nature and the legitimacy it confers on both the state and the government. I’m only trying to speculate if the existing structure could be made better after recognizing its limitations.

The Crony Capitalist Problem: 

Political Parties need money to run for elections, market themselves and their plans to the public. Lacking any finances of their own, they become dependent on donations from the rich and businesses to finance their campaigns and thus become beholden to them. Once in power, political parties feel obliged to repay the debt by preferential treatment to their favorite benefactors.

A solution could be to limit political spending for elections. This will reduce the dependence that political parties have on campaign funding. At the same time, all political contributions should be public and traceable. All transactions between the government and its campaign benefactors such as award of licenses and contracts should be investigated by an independent body for potential conflicts of interest. Any instances of quid pro quo should be investigated and offending parties should be penalized suitably.

The Demagogue Problem: 

People are susceptible to rhetoric and hysteria that is frequently drummed up by unscrupulous politicians for political dividends.

The long-term fix for this is the presence of a very enlightened population that is immune to demagoguery. Given the reality of human nature, this is so distant that it is not really an option at all. Even university educated adults become easily enchanted with political hyperbole and rhetoric.

A simpler solution is to set up an independent commission to create a code of conduct for political speeches and  regulate planned and delivered political speeches for unnecessary rhetoric, misstatements or hysteria. This body basically acts as a censor for political speeches and ensures sobriety and compliance with its code of conduct. It’s crucial that this body remain neutral and not have political appointees.

The Post-Truth Problem:

People cannot be expected to fact-check everything themselves and become susceptible to lies, untruths and half truths propagated by politicians. Social media and digital information loops aid in the spread of sensational but false news.

Originators of incorrect information on the Internet should be tracked and penalized while platforms like WhatsApp and Facebook should develop algorithms and strategies to recognize and suppress the spread of fake news. If the untruth is propagated directly by the politician (eg: some statement about India having test tube babies in the Vedic Age),  it should fall under the ambit of the political censor body. Truthfulness and good intentions should be one of the codes of conduct that all political discourse should follow. Independent fact checking bodies should analyse political speeches and assign credibility scores to politicians. Those with low credibility scores should be suspended from holding public office.

The Freedom of Expression Problem:

Honest folks can be targeted easily and their reputation sullied using the so called ‘freedom of expression’

While defamatory speech is punishable, it has not deterred people from making false accusations against political foes. After seeing a barrage of such accusations, most folks will be unable to determine which accusation is true and which is false, which is actually the strategy libelous people employ. Even innocent people who go through a trial by media become guilty in the eyes of the public, purely by repeated association. To counter this, libel laws should be made stronger to prevent character assassination of people and reputation damage. A side-effect of this will be that the quality of public discourse will improve a lot.

The Grasshopper Problem*:

The short 5 year election cycle creates strong incentives for short-term populism and discourages long-term investments in the future of the nation. For a government, the primary objective is gaining and retaining power every 5 years. It is beholden to meet the needs of the citizen of today and not the needs of the next generation.

This short cycle leads to some poor economic choices. It encourages the sale of long term assets for meeting current fiscal needs. Governments feel compelled to undertake populist policies that go against the long term interest such as granting loan waivers and forcing public sector companies to take on debt to pay dividends to the government. Nobody wants to invest or spend on items that don’t give immediate political dividend, such as improving the quality and skill of the labour force through education and training. When a government knows that it is about to voted out, it has no incentive to reduce spending because doing so will only give fiscal maneuverability to the next government and help it get reelected.

Solving this requires setting up constitutional safeguards on the spending of money, including hard limits on spending as a factor of Government Revenue. Sovereign Wealth Funds must be established to manage financial assets that the government owns, including stakes in public sector units. Only in extreme and well-defined situations should the fund be allowed to liquidate its holdings. Singapore follows a similar model where its sovereign wealth fund invests judiciously in assets worldwide and the investment income it generates is the biggest contributor to the public budget. The family silver is never sold to meet the household expenses.

*From the fable of The Ant and the Grasshopper

The Irrational Man Problem: Elections are not fought on facts and performance, rather on emotions and hearsay.

While all political parties come out with Election Manifestos, hardly anyone gives it a read. Those who do are so few in number that they would be unable to meaningfully alter the election outcome. Instead of policies, most people vote for candidates based on identity and recall. This leads to situations where people vote for a government that could actually harm their interests. The recent Brexit referendum was a case in point where emotional appeals trumped reason.

There doesn’t seem to be a clear solution to this. A partial solution could be political parties complementing their factual policy choices with credible and matching emotional appeals.

The Fourth Estate Problem: Electronic media can strongly influence public perception, but they are financed by advertisement revenue from political parties and corporates and thus become beholden to them.

Print and broadcast media is a business and requires advertisement revenue to survive. Government spending on TV and print advertisements creates a strong conflict of interest. Media that is critical of the government is less likely to get business from the government and media that toes the official line will be rewarded with taxpayer money. The solution for this is to have laws that limit or curtail spending on marketing and advertising. Even better, the budget for showcasing government achievements should not come out of the state coffers but should instead be ponied up by the political party that is leading the government.

There should also be laws limiting the ownership and advertisement funding of media channels by big corporate houses. This gives them far too much influence over the media body and the public opinion and allows them to extract concessions from the government in return. A respected, independent state-funded broadcaster can also be established, along the lines of the BBC.

The Double Hat Problem: Far too much energy is spent on marketing, campaigning and very little on actual governance. If campaigning is not done properly though, there is a risk of the incumbent government being voted out.

A precursor to delivering effective governance is getting elected and retaining power in subsequent elections. The elected leader of the country also has a figurehead responsibility and must fulfill it by touring the country and making speeches, attending gatherings e.t.c All of this is both an expensive and a full time job and takes time away from doing actual policy work. A leader who is assured of his office and does not need to worry about getting re-elected does not need to spend his time in this manner.

Perhaps holograms can help here.

The Regression to Mean Problem: Specific to big countries like India. A region or city that delivers out-performance will soon suffer for it in ways like uncontrolled immigration from the rural hinterlands that strains the infrastructure and pushes the quality of life down again. More economically developed parts of the country also have to pay higher taxes that go towards funding the poorer regions of the country.

An authoritarian country can solve this by imposing travel restrictions and curtailing internal migration.  Such measures will come under constitutional scrutiny in a democracy. Establishing  checks on large flows of people seems to be necessary to avert such problems. An equitable tax sharing system must also be established so that the more developed regions of the country, specifically the cities don’t feel like they are not getting their fair share of the wealth they helped generate.

The Majoritarian Problem: A large and united group can wield enough influence in politics to divert public resources to enrich its members. These groups usually lobby for doles like subsidies and  reservations. Resources meant for public good are then diverted to meet the needs of this special group at the expense of those who don’t happen to be its members.

There should be constitutional safeguards to prevent the diversion of public resources towards the benefit of special interest groups like caste and profession based organisations.