At the start of a New Year, a year when Australia will have to elect a new government, it seems a good time to consider the future outlook for our system of democratic government. Overall there is a sense that citizens in many of the advanced democracies have lost confidence in the capacity of their governments to deliver.
Many explanations for this loss of government capacity have been offered, and in this article, I will discuss what I consider to be the most important explanations as a contribution to the continuing debate about what is wrong with our system of government. In a second follow-up article, tomorrow, I will discuss some of the proposed options to improve our system of government, even if returning to the alleged glory days of the past might be a bit of a stretch.
In Australia, one of the symptoms of the loss of government capability is the proliferation of minor parties, with each of the traditional two major parties now struggling to attract as much as 40 per cent of the electorate, and mostly much less. In the last forty years few Australian governments have controlled both Houses of Parliament, and thus been masters of their own destiny. In the US, Congress is frequently gridlocked, and right now much of the US Government has been shut down. While in Britain, there is no simple majority for any of the three main options for resolving the Brexit crisis: leave with no deal, accept the deal negotiated by Mrs. May, or go back and have another referendum in the hope that the decision to leave the EU will be reversed.
Clearly governments in each of these English-speaking countries are struggling to fashion majority support for their principal policies and even to set a strategic direction. Nor are these problems limited to the English-speaking countries that are most familiar to us. The question that I want to address here is what has led to this situation, as a basis for considering what should and can be done tomorrow.
Economic Stagnation and Increasing Inequality
The 1950s and 1960s represented the Golden Age of capitalism. Economic growth has never been stronger than in those years, unemployment was never lower, and this prosperity was widely shared with inequality falling. Furthermore, most of the institutions to support the welfare state were established in this post-war period and enjoyed almost universal support. By contrast, economic growth over the last decade since the Global Financial Crisis (GFC) has been sluggish, at less than half the rate in the preceding 15 years. Wages have been stagnant, unemployment has been higher and/or employment participation lower, and inequality has increased almost continuously since the early 1980s.
Consequently, many people feel they are worse off, or at least they are no better off and are struggling to make ends meet. Policies promoted by economists in favour of more flexible markets and greater competition, are readily blamed for a loss of job security, as allegedly jobs are transferred overseas or have become casualised. This is an obvious explanation for the loss of faith in expertise and the rise in populism. But for those of us who are part of the ‘policy making elite’, these populist solutions are no solutions, and only serve to exacerbate the problem of governing effectively.
In short, if good government is about finding workable compromises that attract broad-based support, then the present policy-making climate is most difficult for good government.
A more diverse policy agenda
The other significant change is in the diversity of the policy agenda. For the first sixty years of the Twentieth Century, the political divide was based almost exclusively on the different interests of labour and capital. This difference was reflected in the political system, with only two major parties, one representing labour and the other capital.
However, as incomes and education levels rose in the 1960s, and women increased their workforce participation, the nature of our society changed. For example, education has encouraged citizens to be more critical and less respectful of government (and other) authority. New issues such as feminism and the environment were also placed on the policy agenda, and often the enthusiasts for these ‘causes’ found that they could better prosecute their political agendas by joining with other like-minded people in single issue interest groups outside the framework of the traditional political parties.
Second, many of the new agenda issues, such as the environment and moral issues such as abortion or same-sex marriage, involve significant clashes in values, where a negotiated settlement between different participants is extremely difficult. Or as Senator Ryan, the President of the Senate, recently put it: ‘our political system is finding it more difficult to deal with social issues that require a yes/no answer’. By contrast it is typically much easier to find a middle-ground compromise on economic issues. Third, many of the problems that the state is being asked to resolve, such as drugs and child poverty, have complex causes, and are often well outside the state’s control.
But according to Mansbridge (1997), it is this incapacity of governments to meet the different and typically incompatible expectations of different groups of citizens over a wide range of issues which are inherently insoluble that is most responsible for the decline in trust in government. Furthermore, this widening of the policy agenda has not happened over night. Indeed, as long ago as 1995, the late Ian Marsh, in his book Beyond the Two Party System, wrote about the impact of the more diverse policy agenda on the two major political parties and the Australian system of governance,.
It is frequently asserted that the poor quality of present government decision-making and political debate is due to the poor quality of our leaders. Indeed, that may provide at least part of the rationale for the rapid turnover of these leaders. However, I am less sure. I agree that leaders can make a difference, and I will discuss that aspect further tomorrow when I discuss possible improvements to our government system. But for the most part, I think the quality of leaders such as President Trump, mainly reflects a response to the changing nature of the electorate. In the eyes of Trump’s rusted-on supporters, previous Presidents and their associated policy elite advisers have failed to acknowledge let alone meet the expectations of ordinary working people. In other words, the quality of leadership is more a symptom of the problems of governance that we are facing, rather than the cause.
In sum, the business of government has become more difficult. The number of competing and often incompatible issues demanding government attention has widened. Economic growth has been stagnant in most economies for the last decade or so, and many people’s expectations for their living standards are no longer being met. In addition, a better educated public has become much more critical, less respectful or trusting of authority and much more able to access news from sources that accord with their views and tell them what they want to hear.
Changing this situation will not be easy and at best it will take time. Some ideas for reform of government, that have been proffered, will be discussed tomorrow.
Michael Keating was Secretary, Department of Finance and Department of Prime Minister and Cabinet.