The global credit crunch took the world by surprise. Debates on the "future of
capitalism" have taken center stage, and governments around the world now
indulge in the fact that the balance of power is shifting again in favor of the
state. Batteries of regulations are in the making. The retrenchment of the
private sector and the suffocation of risk-taking entrepreneurship and
innovation are likely casualties. The debate we should really have, though, is
titled "The Future of Democracy". This age, characterized by a blind fixation
on democracy as the answer to all ills, is likely to come to an end.
The
current credit crisis offers a unique opportunity to question our economic,
regulatory, and fiscal structures. But more importantly, we should question the
process that generates these choices in the first place and determines their
fulfillment. Democracies must become corporate and results-oriented.
Reforms should center on the role of the individual lawmaker, the mandate for a
political business plan, and the relationship between the legislative and
executive.
Similar
to Switzerland's system, lawmakers should not be career politicians, but
practice a profession outside of parliament. This is likely to take the "glamour"
out of lawmaking, but should increase the emphasis on efficiency and results.
Every parliament should also include a certain number of lawmakers that have no
past or present affiliation with any one political party. This has the
potential to reignite the electorate's engagement in the political process.
Modern media, blogging and social networking have substantially reduced the
individual's barriers and costs to entering politics, but for the gate-keeping
of political parties. We must end the vicious trap where a lawmaker's
independence and political judgment are hijacked by party politics to the
extent where the latter solely defines one's political existence and
consciousness.
Election
manifestos must become business plans - defined by principles and measured by
performance benchmarks against spending. Once approved by the legislative, the
executive must be fully empowered to execute with authority. Government
spending must be capped as a percentage of gross national product for the governing
period. During the governing period, the legislative's primary responsibility
is to supervise the execution of the "business plan" and ensure that ad-hoc
policy making is in accordance with established principles, objectives, and
spending.
The
consequences credit market implosion will serve as a catalyst to break the thin
ice on which democracies and its leaders have operated for too long. With
hardly any understanding of the implied systemic risks of allowing the
financial services industry to excessively prosper, political leaders in the
world's democracies ignored the obvious warning signals, and they, more so than
bankers, should be held to account. This debate, currently suffocated by a
cloud of regulatory activism and an emotional deprecation of the financial
services sector, has yet to start.
In
the meantime, more and more aspiring individuals will decide to exit democracies
which are over-taxed and have poor public services for more promising places
eastwards. Voice has become meaningless, and loyalty to any particular system
or country is progressively diminishing. Democracy must reinvent itself to
truly represent the citizen's interests.
Bijan Khezri, a London-based entrepreneur-financier, is the author of Generation Dubai: Exit, Voice and Loyalty.
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- Mansur Seddiqzai: Reigning in the Nation State
- 5
April 23, 2009
Unregistered User
As a customer I expect the good price-quality ratio when I buy a product or service from some company. I another company has a better ratio, I'll change company.
This is not possible with governments: no market discipline. What is more: I expect so much more from my government. Safety, security; too many things that cannot be labeled as ordinary services.
Having said that: Bijan Khezri's plea has some virtue, like all pleas for New Public Management. We must make sure that governments are result oriented, efficient. But not at all costs. There is more to take care of.