Defects of Democracy and Options for Institutional Reform

Strategic Insights, Volume IV, Issue 12 (December 2005)

by Martin Brusisand Peter Thiery

Introduction

Many of the new democracies that emerged after the end of the East-West confrontation have successfully sustained key democratic institutions but continue to be marred by problems of the rule of law, democratic accountability and public disaffection.[1] Authoritarian regimes in the Arab world and in Central, East and South-East Asia have demonstrated a remarkable resilience. Externally imposed regime changes in Afghanistan and Iraq have brought democratic elections and constitutions while major political forces and social groups in these countries lack a consensus over the scope and nature of democracy and the state. These developments suggest that it is relatively easy to accomplish democratic elections and to prevent new democracies from falling back into openly authoritarian regimes. But democratization may become stalled and new democracies are susceptible against the erosion of their normative and substantive content.

The apparent persistence of defective democracies has shifted the attention of scholars from studying the causes of regime change and regime consolidation to exploring the quality and performance of democracy.[2] Building upon this paradigm shift, the present paper examines the impact institutional choices are likely to have on the defect patterns of democracy. We assume, firstly, that the persistence of democratic defects calls for accumulating a more robust knowledge about the effects changes of given institutional settings, such as the electoral rules, system of government, executive or administration will have on these defects. Secondly, we assume that the relatively well-charted effects of institutional engineering in consolidated democracies of high-income industrialized countries can not be simply taken for granted in countries characterized by persistent defects of democracy.

The paper starts by exploring the defects of 50 democracies on the basis of data produced by the Bertelsmann Transformation Index (BTI), a global assessment of the management of democratic and economic reforms. How these defects are affected by key institutional reforms is discussed in the following section. We focus on proportional electoral rules, a parliamentary system of government, a more powerful executive and a decentralized public administration. We consider formal institutions because institutional changes are more directly linked to political action and may be achieved easier than changes of cultural patterns, social or economic structures. All four reforms represent major topics in contemporary scholarly debates about democratization and comparative politics.

Defects of Democracy

What are the main defects of democracy? To explore this question, we study a sample of 50 defective democracies in seven regions of the world. Based upon the Bertelsmann Transformation Index, we select all countries that hold free and fair elections and that are characterized by a minimum of constitutional checks and balances (71), except for 20 countries that can be considered as consolidated or nearly consolidated constitutional democracies.[3] Our sample includes 16 African, six South and Southeast Asian, 15 Latin American and Caribbean, nine Southeast and East European countries as well as Lebanon, Mongolia, Papua New Guinea and Turkey.

A comparison of the disaggregated democracy ratings for these countries shows that their representative structures, rule of law and state capacity are considered most problematic (see Figure 1). The electoral process and the exercise of political participation rights are, in contrast, rated more positively. The stability of democratic institutions is also evaluated positively in absolute terms, but is a component of democracy where defective democracies perform much weaker than consolidated democracies. Political corruption, the lack of an independent judiciary, the weakness of civic self-organization, weakly developed networks of interest associations, feeble party systems, an insufficient state infrastructure and a contested state monopoly on the use of force are seen as the seven most salient deficiencies in defective democracies, in comparison with other elements of democracy and if the mean scores for 20 consolidated democracies are taken as benchmarks (see Annex).

 Figure 1: Differences between defective democracies and consolidated democracies/BTI maxima

Source: BTI 2006. Difference between average ratings for 50 defective democracies and 20 consolidated democracies (“relative gap”) and best possible BTI ratings (“absolute gap”).

Colombia, Guatemala, Lebanon, Moldova, Papua New Guinea, Russia and Sri Lanka are classified as most defective, whereas Argentina, Benin, India, Mexico, Macedonia and Panama constitute the least defective democracies. This wide range of countries indicates that the degree of defectiveness varies strongly across regions. If the regional mean scores are compared, Russia and the East European/Caucasian member states of the Community of Independent States (CIS) are classified as most defective, while four Southeast European democracies show the least deficiencies.

Corruption and, in particular, the inclination of public officeholders to abuse their position to further their private interests constitute severe problems in all regions of the world. Regarding other major deficiencies, a number of interregional differences are revealed by the BTI figures. An instable and insufficiently representative party system is most characteristic for Asia and the CIS region including Mongolia. The latter region has the most weakly developed structures of civic self-organization and interest representation, which seems to be associated with serious violations of the freedom of media and weak horizontal accountability mechanisms. Defective democracies in Latin America and the Caribbean are characterized by relatively severe problems with the popular acceptance of democratic norms and frequent infringements of civil liberties. Religious authorities have only very limited political influence and democratic elections are held largely without restraints in this region. The South East and South Asian democracies of our sample are characterized by weak intermediary organizations, disrespect for the rights of ethnic and religious minorities and a relatively salient political role of churches and religious dogmas, while their judicial systems are considered as comparatively independent.

The Central and West African democracies suffer mostly from fragile state and administrative infrastructures, but seem to be able to rely on a broad and strong popular consensus about democratic norms. This consensus is much weaker in Eastern and Southern Africa which is also reflected in the weaker acceptance of democratic institutions among relevant political actors and graver conflicts between democratic institutions as well as certain restrictions to free elections. The four defective democracies in Southeastern Europe are characterized by ethno-political conflicts, but perform fairly well with respect to participation and administrative capacity.

The state of development of democracy in our 50 defective democracies is not correlated with economic wealth, manifested as gross national income per capita at purchasing power parities (see Figure 2). This means that the quality of democracy does not depend on economic prosperity. Indeed, the average quality of democracy in the 23 countries with a per capita income of less than 3,000 USD is rated higher than in the 13 countries with income levels between 3,000 and 6,000 USD. However, there is a significant correlation between economic wealth and the ability to ensure a working administration throughout the territory. This indicates the particular difficulties low income countries face in establishing an operational administrative infrastructure.

 Figure 2: State of democracy and economic development in 50 defective democracies

The seven major deficiencies—corruption, insufficiently independent courts, weak civic self-organization, feeble interest associations and party systems, lacking administrative infrastructure and a contested state monopoly on power—are manifestations of three distinct defect syndromes that can be identified by a principal component analysis. The analysis shows that 73 percent of the variance in the configuration of the seven deficiencies can be explained by three underlying components (see Annex).

In countries where the state can not fully exercise its monopoly on the use of force, there are also frequent problems with sustaining a basic administrative infrastructure throughout the territory and with the stability of the party system. This defect syndrome may be characterized as state weakness and can be observed particularly in Colombia, Georgia, Lebanon, Mali, Moldova, Nigeria, Sri Lanka and Uganda.

If the judiciary is subordinated to political authorities or restricted by functional deficits, one can also observe a higher likelihood of public officeholders that abuse their positions and escape prosecution. This syndrome may be labeled as unaccountability. Countries where this defect is particularly salient are Armenia, Burkina Faso, Ecuador, Lebanon, Moldova, Nicaragua, Paraguay, Sierra Leone and Venezuela.

A lack of civic self-organization is frequently accompanied by weakly developed networks of interest associations and an unstable party system that does not effectively articulate and aggregate societal interests. This defect syndrome may be dubbed representation weakness and is most visible in Bosnia, Georgia, Guatemala, Madagascar, Malawi, Moldova and the Russian Federation.

Choices for Institutional Reform

This section discusses institutional choices to address state weakness, unaccountability and representation weakness. We ask whether a proportional electoral system, a parliamentary system of government, a more powerful executive and a more decentralized public administration are likely to overcome the defects of democracy observed in the previous section.

Increasing electoral proportionality

A first option to address democratic weaknesses is the choice of the electoral system as a set of rules generating the relevant political forces. Traditionally, the scholarly discussion has revolved around the juxtaposition of majoritarian versus proportional electoral systems, while in reality mixed systems prevail. Normative approaches to the study of electoral systems characterize the logics of the two systems in an ideal type fashion.[4] Majoritarian systems are seen to provide a more efficient and stable political process as they avoid party fragmentation, lead to a concentration of parties approximating a two-party-system, foster stable governments during their terms of office, but also increase the probability of more frequent changes between political alternatives. Proportional representation systems, in contrast, provide for a greater representation of all societal interests, avoid artificial majorities, induce a climate of compromise and negotiation and are more sensitive to changes in society and to emerging issues. To strengthen or consolidate democracy, this ideal-type view suggests a trade-off between effectiveness on the one hand and the extensive recognition of (individual or group) preferences on the other.

Empirical research draws a more differentiated picture of the causes and effects of electoral systems. Not only are there so many mixed forms of electoral systems that they cannot be assessed as either majoritarian or proportional. It is also not easy to evaluate the effects of electoral systems in general terms, given that they are highly sensitive to the context in which such systems are embedded (e.g. the institutional environment, the heterogeneity of society, the structure of cleavages, the fragmentation and/or institutionalization of the party system, the political culture etc.). Finally, electoral systems tend to confirm the societal structures and political conditions under which they have been chosen, reflecting the extant social and political reality. Thus it depends on the respective contexts and conditions if democratic political stability is to be achieved by moving towards a majoritarian or by proportional electoral systems.

From both approaches we can conclude that there is no a priori preferable choice which could be applied uniformly. However, this conclusion needs to be qualified for the three main defects of democracies—state weakness, unaccountability and representation weakness. The choice of an electoral system is most influential for the quality of representation structures.

Increasing proportionality has become a prominent proposal to solve problems of heterogeneous societies. As majoritarian systems tend to ignore structural minorities, proportional representation might help to alleviate conflict and avoid centrifugal tendencies. However, this need not be inevitable, as it also depends on the resilience of the existing party system and its ability to integrate minorities. Majoritarian systems can provide incentives for parties to bridge ethnic or other cleavages if votes from different segments of society are needed to attain a majority.[5] As a rule one can formulate that if (1) societal heterogeneity has become a political salient issue and (2) the (majoritarian) electoral system is an impediment for conflict resolution, it is preferable to increase electoral proportionality in order to integrate the centrifugal forces. This may also mitigate the problem of state weakness, if the state has lacked legitimacy among the formerly underrepresented population. However, (more) proportional representation seems to be only one part of the solution. Especially in ethnically divided societies the formation of new parties does not necessarily lead to a politics of accommodation, but might also reinforce ethnic confrontation. Additional safeguards are required, such as a veto rights, grand coalitions or guarantees of segmental autonomy—the components of consociational democracy.[6]

On the other hand, increasing proportionality is by no means a uniformly applicable solution to representation problems. Including a wider spectrum of preferences by increasing opportunities of representation also increases the fragmentation of the party system. Party fragmentation, however, represents one of the core problems of many young democracies as it leads to uncertain majorities and political instability. In those cases, the solution for representation problems may even be a weakening of proportionality in order to enhance stability, for example by introducing an eligibility threshold for parliamentary representation.

In sum, the introduction of a (more) proportional electoral system is strongly dependent on the societal context and the institutional environment in which it is embedded. Like any change of the electoral system it is not so much a question of technical improvements to further inclusiveness but a question of power. Typically, profound changes of electoral rule occur either during a transition from authoritarian rule itself or in situations of crisis, for example when strong ethnic minorities claim representation. The abovementioned trade-off between efficiency and inclusiveness thus becomes part of the power game itself.

The literature on electoral systems does not provide a clear lesson about the relationship of electoral systems and unaccountability. A higher number of party players and hence a greater uncertainty in coalition building may represent a more favorable incentive structure for establishing accountability mechanisms, above all an independent judiciary.[7] However, as Kunicová and Rose-Ackerman argue, proportional representation systems also seem to be more susceptible to corrupt political rent-seeking than majoritarian systems, especially in combination with presidentialism.[8]

Parliamentarization of government

As a second option to overcome key defects of democracies, we consider the change from a presidential to a (more) parliamentary system of government. Discussions about the role of presidential systems for democratic consolidation surface time and again. The main focus of this long debate in democratization research has been whether parliamentary or presidential systems of government are more supportive for the consolidation of democracy.[9] Parliamentarism can be defined as the form of democracy “in which the executive authority emerges from, and is responsible to, legislative authority.”[10] In contrast, presidentialism is a system where executive and legislature are elected separately and where neither branch can act to shorten the term of the other.[11] Systems where cabinets are accountable to parliament and a popularly elected president are classified as mixed systems (presidential-parliamentary, premier-presidential, and semi-presidential).

Most researchers agree that presidential systems are less capable of solving problems than parliamentary systems because they divide authority between the executive and the legislative, cause legislative gridlock, support populism, generate myopic, ad hoc policies and politicize controversial issues.[12] As presidential systems separate parliamentary deputies and parties from the executive, legislators become less interested in providing national policy than in parliamentary systems.[13] Parliamentary systems also provide better conditions than semi-presidential systems for a successful democratization and the consolidation of democracy.[14] The reason given in Rüb’s study is, first, that the bipolar executives characterizing semi-presidential systems are more prone to populist politics and ethno-nationalist mobilization than the executives of parliamentary systems. Second, bipolar executives can not compensate the weaknesses of a fragmented or polarized party system. Presidential and also semi-presidential systems thus pose additional difficulties for a reform management and weaken the ability of a political leadership to commit itself to reform policies and to implement them against political resistance.

In sum, the argument is that presidential systems in emerging democracies have a detrimental effect on their stability. The BTI data also suggest a correlation between weak democracies and the adopted system of government. As Table 1 shows, presidential systems are more frequent among defective democracies, while most consolidated democracies are parliamentary systems.

 Table 1 : Presidential and parliamentary systems of government in democracies

Concerning the prospects of democratic consolidation, the above-mentioned deficiencies suggest that presidential systems tend to be dominated by the logic of confrontation and conflict. Conversely, parliamentary systems seem to be dominated by the logic of coalition and consensus building. However, empirical research on presidential systems shows that this general observation has to be attenuated by observing the context factors that support these negative tendencies. The question frequently is which type of institutional structure forms the government system as a whole. Especially the overall weaknesses of democratic institutions including the judiciary and the state apparatus are more likely if there is no tradition of institution building as in Chile, Uruguay, Taiwan or South Korea.

The context of actor constellations, cultural traditions and institutional conditions determines how a system of government affects reform policies.[15] One approach to structure the ambiguous policy effect of different systems of government is to distinguish between policy decisiveness (i.e. the ability to make policy decisions) and policy resoluteness (i.e. the ability to commit to established policy decisions).[16] Presidential systems can be expected to be more resolute and less decisive than parliamentary systems since a powerful president represents an additional veto actor whose support is required to change the status quo. Whether this is indeed the case, depends on other features of the institutional arrangement. Concurrent presidential and legislative elections, a party-centered electoral formula, a unicameral assembly elected congruently with the president’ constituency, and full renewal of all legislative seats at each election support the decisiveness and reduce the resoluteness of policy-making. Conversely, non-concurrent electoral cycles, staggered assembly elections, candidate-centered electoral formulas and incongruence between president’s and parliament’s constituency support resolute, but indecisive policy-making.[17]

How, then, can parliamentary systems help overcoming the above-mentioned defect syndromes? The effect of the system of government on state weakness is more an indirect one. As presidents in new democracies are seen as the embodiment of the state, a leadership or government crisis deriving from the logic of confrontation may lead to a state crisis. This delays the development of stable state structures including the monopoly on the use of force, as the military and/or the police have to be involved in crises which have their origin in government crises. Equally important is the impact on public administration as a subsystem organized according to professional standards and legal-bureaucratic rationality. Presidential systems with their logic of ‘elected kings’ and the principle of ‘winner takes all’ frequently lead to a pronounced clientelism in the civil service. Parliamentary systems on the other hand, though they often share a clientelist legacy, are more dependent on the continuity of the state administration which favors a more stable and professionalized administration.

Concerning unaccountability, i.e. the weakness of the judiciary as an independent branch of power and the problem of political corruption, parliamentary systems also seem to have advantages in overcoming or at least not aggravating these defects. The subordination of the judiciary in most defective democracies, while surely having its roots also in the judicial culture, is more accentuated in presidential democracies. This subordination is the outflow of the logic of confrontation and the logic of competing legitimacies between executive and legislative. As the judiciary is a ‘dependent’ power with respect to its legitimization, executive and legislative tend to conceive the judicial system as just another political battlefield. In parliamentary systems, on the other hand, the incentive structure for unaccountability is less pronounced. Except for majoritarian systems with one party domination, the ongoing competition for power and the possibility of changing coalitions leads to a perception of ‘iterated games’ and extends the time horizon of political actors. More reliable mutual expectations improve the likelihood of stable institutions including a functioning judicial system to ensure accountability.

The most positive effects of parliamentary systems for strengthening democracy are to be expected in the party system, with further effects for the whole representation structure including the functional interest groups and civil society. As parliamentary systems require stable party structures for the generation of political options, political leadership, and seizing power, their strategic position is quite different from the party players in presidential systems. In contrast with presidential systems, parties have to focus more on programmatic alternatives than on the personal virtues of individual leaders and their often erratic and ephemeral preferences. Parties also have to seek a closer connection to the citizens’ preferences in order to present eligible alternatives. This in turn requires closer links to interest groups and civil society and induces a more vibrant representation system. This does not mean that the system of government is the only determinant of functioning party systems. Other factors may neutralize or transform a destabilizing impact of the system of government, as indicated by the presidential democracies in Chile, Uruguay, Costa Rica, Taiwan and South Korea which have successfully nurtured stable party systems. However, to overcome weak representation structures, parliamentary government provides more appropriate incentives than presidentialism.

Though the debate on presidentialism is still ongoing, parliamentary systems seem to have comparative advantages vis-à-vis presidential systems to deepen democratic development. Therefore, introducing parliamentary models should be a priority strategy particularly during a transition from authoritarian to democratic rule. If the political conditions allow, existing presidential systems should be transformed into parliamentary systems. However, as the example of Latin America shows, if presidentialism is deeply rooted in the political culture or in the collective imaginary, it may take a long way to change the system of government. As an alternative, existing presidential systems could be strengthened by developing a “culture” of building and respecting institutions as well as professionalizing their party systems. This way, however, is a long one too.

Empowering Executives

A third option to address democratic defects is to strengthen the power of governments. This can be done by reducing the number of constitutional and partisan veto players and by weakening their veto powers. Restricting the constitutional powers of the president, for example, would reduce her or his opportunities to obstruct governmental policy making. Reinforcing the majoritarian elements of the electoral system would reduce the fragmentation of parliament and, accordingly, the number of parties required to form a parliamentary majority. This could generate more cohesive cabinets backed by more secure legislative majorities. In bicameral legislatures, the veto power of the second chamber could be weakened or abolished. The thresholds for a judicial review of government policies could be increased.

Empowering reforms could also target the government directly, for example by strengthening its agenda-setting and agenda control powers in parliament. The government could be given more discretion about organizational, budgetary and personnel matters. Regulations could take the form of executive decrees rather than laws. The expert support to ministers and, in particular, the prime minister could be improved. Strengthening the prime minister’s position in cabinet would enable her/him to better enforce the government’s interest against departmental concerns.

How do such reforms affect development and democracy? Two main lines of argumentation may be distinguished in the literature. The conventional view emphasizes the importance of executive authority, autonomy and power for policy reforms and effective governance. This view has been substantiated with the case of the East Asian economies that were able to catch up with Western industrialized countries because they were led by activist states that channeled export revenues into education, research and development spending and coordinated the successive technological upgrading of production facilities.[18] Competent states are needed to cope with the challenges of globalization, to combat poverty and to meet expectations of their citizens.[19]

Strong governments are required to overcome the resistance of status quo interests and to act in the strategic, long-term interest of a country.[20] Based upon a comparison of policy reforms in 13 countries, Williamson and Haggard argue that successful reforms are facilitated by a strong base of political support, visionary leaders and a coherent economic team with a comprehensive program.[21]

Centralized and unconstrained executive authority is required to initiate economic reforms. “In every successful reform effort, politicians delegated decision-making authority to units within the government that were insulated from routine bureaucratic processes, from legislative and interest group pressures, and even from executive pressure. ...successful policy reform efforts were preceded by reforms within the bureaucracy itself, reforms that pried policymaking away from existing channels and centralized decision-making processes across relevant agencies.”[22] The higher the durability of cabinets, the higher appears the ability of executives to formulate strategic, long-term policies and to sustain a problem-solving policy style rather than adapting their policy-making to the political logic of the electoral cycle.

In this view, more powerful governments are likely to overcome state weakness since they are better equipped to build an administrative infrastructure covering the entire territory and to exercise and defend the state’s monopoly on the use of force.

The alternative line of argumentation in the literature claims that consultation with social actors and building broad policy coalitions in society actually strengthens the governing capacity of executives. Developmental states in East Asia could successfully modernize because they combined internal coherence and external connectedness.[23] Their “embedded autonomy” has prevented them from being captured by particularist economic and political elites and from becoming predatory states consuming the country’s resources. A more recent study of 35 emerging democracies has shown that political systems with multiple veto players achieve higher levels of the rule of law because in such systems veto players face incentives to refrain from collusion.[24]

The consolidation of economic reform requires the balancing and control of executive authority through representative institutions, checks on executive discretion and the delegation of authority to independent professional agencies.[25] These mechanisms are needed to sustain reform policies, since they broaden the social base of support and reduce policy uncertainty. In this perspective, policy reforms are less jeopardized by the losers of economic adjustment than by the winners of the first reform stage.[26] Asset stripping enterprise insiders, commercial bankers profiting from distorted markets, local officials with monopoly rents and Mafiosi can “stall the economy in a partial reform equilibrium that generates concentrated rents for themselves while imposing high costs on the rest of society.”[27]

Institutional devices that increase the accountability of executives, such as more frequent elections and shorter executive tenures, improve competition among political actors and thus reduce the blockade power of such vested interests. "Institutional configurations that constrain executive authority are more likely to yield coherent formulation and implementation of economic reforms ...executive capacity, understood here as the capacity to formulate and implement coherent reform programs, can be increased by limitations on the unilateral prerogatives of executive authority.”[28]

An enabling function of institutional constraints has also been identified for the internal organization of government. Ministerial policy unreliability can be controlled well in collegial executives because these executives rely more on internal mechanisms for ensuring that their policy proposals are not vetoed.[29] The main reason for this is that cabinet members can be assumed to have internalized collegiality norms in the course of their selection and appointment. By contrast, in hierarchical executives, political tradeoffs take place outside the executive rather than within, and thus internal controls of unreliability will be less effective. Ministers in hierarchical governments face stronger incentives to serve their constituency and departmental interests.

In sum, this literature suggests that constraining executives is the best choice to cope with the defect of unaccountability since constraints on executive power limit or prevent the abuse of public offices by their incumbents. The literature indicates a certain tradeoff between policies addressing state weakness and policies aimed at improving accountability. It can, however, also be read as an important qualification to the conventional position in favor of powerful executives. Executive power is conceived not only as the capacity to enforce policies but comprises the capacity to sustain policies over a longer period. More effective accountability mechanisms may thus additionally strengthen executive power which would enable an executive to address state weakness even more effectively.

Neither the conventional nor the alternative argumentation suggest a clear lesson with respect to the impact a powerful executive exerts on representation weakness. We therefore conclude that empowering executives is a strategy that has little direct effect on the representation structures of defective democracies. It should not be applied as a priority strategy if a democracy suffers mainly from representation problems.

Decentralizing Public Administrations

As a fourth option to address democratic defects, we consider the decentralization of public administration. Decentralization can be achieved by transferring powers and resources from the central to regional and local levels of government. Democracies usually include institutions of local self-government that could be addressees of decentralization. To become effective, the transfer of legal competences to municipalities should comprise the provision of appropriate funds that enable municipalities to perform their new functions. The literature on public finance emphasizes that a decentralization of spending powers should be combined with a decentralization of taxing or revenue-raising powers so that the sources of revenues and the beneficiaries of expenditures are as congruent as possible.[30]

Decentralization is often distinguished from de-concentration which is conceived as the transfer of powers from central to local units of ministries or state administration. Whereas de-concentration implies that the instructing and supervisory powers of central government units are retained, decentralization means that central government bodies abandon powers. In most democracies, sub-national self-governments perform tasks delegated to them by the central government and tasks belonging to their own competences. The central government usually supervises the activities of sub-national self-governments more or less closely. A more far-reaching decentralization entails the transfer of legislative powers to sub-national levels of government. Decentralization may also be achieved by endowing regional levels of government with powers or by establishing regional self-government. Such regional units may be involved in the legislative process on the national level, rendering the political system a federation.

How does decentralization affect the main defects of democracy? In the policy-oriented literature, decentralization is seen as a key tool for broadening the participation of citizens in policy making.[31] More participatory forms of governance can reduce unaccountability since they expose government officials and decision making to a more direct scrutiny by local stakeholders and the public. As stronger accountability is likely to increase a government’s sensitivity to local conditions and needs, democracy will become more responsive. Decentralization may facilitate greater political representation for diverse cultural, ethnic and religious groups in decision making. As such groups may become numerical majorities or significant political actors in sub-national territorial units; they have better chances to determine issues they consider of vital importance for their community. As a consequence, representation structures could be strengthened.

Decentralization can improve government effectiveness since it relieves central government bodies from planning and control activities and supports central government ministries in covering more local areas with services. This would positively affect the defect of state weakness. In addition, decentralization can lead to greater effectiveness by encouraging experimentation and learning among local government units. The literature on fiscal decentralization and new public management views decentralization as an essential element of more efficient government. Local units of government are provided with larger discretion over their budgets, and their performance is measured in comparison with the performance of other local units. Because budgetary allocations are linked to meeting performance targets, local government units face incentives to improve their performance. Moreover, autonomous revenue-raising powers are expected to induce local government units to reduce taxes in order to attract investors.

Thus decentralization appears to be an effective instrument to address all three major defects of democracy. It may, however, have problematic consequences for a democracy if it institutionalizes local enclaves of authoritarian practice or paves the way for separatist political actors.[32] If the local civil society is weak or if cleavages between center and periphery are polarized, local political leaders may exploit the decentralization of powers to promote separatism or to repress newly generated local minorities. Creating new tiers of government may also entail an increase of bureaucracy and additional costs. Moreover, the efficiency gains of decentralization may be combined with a widening of regional disparities and a deterioration of service quality in less developed areas. These problems and risks may offset the positive impact decentralization may exert on state weakness.

To avoid negative side-effects of decentralization, three key conditions should be fulfilled. First, citizens and local stakeholders should be involved in exercising decentralized power. Such participation provides forms of accountability that can replace the functions of prefects or central government supervisory bodies. Second, decentralization should be organized as a learning environment where horizontal learning among decentralized units and the horizontal diffusion of best practices are supported. Third, states should develop clear legal rules and limits for sub-national levels of government that protect self-governing rights and sanction the abuse of these rights. Such rules should also regulate the allocation of financial support to local government bodies and clarify how the central government will assist local government units with financial problems.

Conclusion

Our empirical inquiry into the defects of democracy has shown that key defects exist both on the input and output side of the political system, undermining its input legitimacy as well as its output legitimacy. While the weakness of representation structures linking society with the political system vitiates the input legitimacy of new democracies, the weakness of state administration, often related to a contested state monopoly of power, harms the output legitimacy of democracies. Unaccountability, the third major, empirically observable defect of democracy, affects both sources of democratic legitimacy since it weakens the power of public interest institutions to hold officials accountable and enables public officeholders to abuse their position. Of the four institutional choices discussed in the present paper, two address input and, respectively, output deficits directly (see Table 2).

 Table 2 : Defects of democracy and effects of institutional choices

Synthesizing the detailed discussion in the second section, Table 2 denotes the effects of institutional choices for democratic defects identified on the basis of the BTI assessments. Moving towards a proportional electoral system may improve the representativeness of the party system and thus the input quality of democracy, if care is taken to prevent party fragmentation. However, the defects of unaccountability or state weakness are not affected in a clearly negative or positive fashion an increase of electoral proportionality.

Strengthening the executive constitutes a reform that aims at improving the output quality of democracy and is likely to overcome state weakness. This effect rests on improvements of the steering capability of executives. Empowering an executive is, however, likely to weaken the accountability of government and does not have a clearly negative or positive effect on representation weakness.

Parliamentarizing the system of government and decentralizing public administration are two institutional reforms that affect both output and input defects of democracy. It is perhaps not surprising that these two reforms are likely to have the most positive effects on our defect patterns, since they can be seen as integral or composite approaches to cope with democratic defects. Taken together, our four reform strategies represent a differentiated menu of tools to combat defect patterns in democracies. While the defects may occur together, one can also pursue several institutional reform strategies in parallel. Such an approach is particularly expedient if one reform tends to reinforce or enhance the impact of another reform.

However, certain reforms may also limit or thwart the impact of other reforms. For example, endowing the executive with more powers seems to be incompatible with the decentralization of governmental powers. Whereas the former reform prioritizes steering capability, the latter reform improves the incentives for consensus building. Increasing electoral proportionality tends to weaken executive power as governments are likely to consist of party coalitions that are more dependent on the power constellation in parliament than the single-party majority governments typically generated by majoritarian electoral formulas.

Establishing a parliamentary system of government can be seen as a priority strategy as it is likely to influence all three major defects of democracy positively. It could be combined with a strategy to increase executive power in order to address problems of state weakness that are particularly wide-spread in low-income countries. Where presidential systems are embedded in the national political culture and thus difficult to change, parliamentarization could be linked with decentralization by establishing parliamentary models on the regional level. This would not only avoid local authoritarian enclaves but could also be used to initiate learning processes and cultural changes.

We have to keep in mind, however, that such institutional choices represent only one—and probably a relatively easily to manipulate one—leverage point to improve the quality of defective democracies. Defects do not only stick to institutional arrangements but are embedded in socioeconomic conditions, societal structure, cultural predispositions and international constellations. An institutional engineering that ignores this context could create artifacts hiding informal practices rather than institutions that regulate behavior and shape expectations.

(Click here to view Table 3: BTI democracy assessment—mean scores by region and by type of democracy.)

Table 4: Defect patterns in defective democracies: principal components underlying the BTI ratings

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. Rotation converged in 5 iterations.

Table 5: Patterns of democratic defects

Countries are classified according to whether they attain positive (low) or negative (high) factor scores for the three components underlying the seven major deficiencies of democracies, as identified by the BTI 2006. Note that “low” and “high” are relative classifiers and neglect considerable intra-group differences.

 About the Author

Martin Brusis is an analyst at the Center for Applied Policy Research, University of Munich. He works on comparative government and democratization in East-Central and Southeast Europe. Peter Thiery is senior research fellow at the Center for Applied Policy Research (CAP) at Ludwig Maximilian University in Munich, Germany. Peter may be reached by e-mail at: peter.thiery@lrz.uni-muenchen.de.

 References

1. W. Merkel, H.-J. Puhle, A. Croissant, C. Eicher, and P. Thiery, Defekte Demokratie. Band 1: Theorie. (Opladen: Leske + Budrich, 2003).

2. See, e.g. D. Berg-Schlosser, "The Quality of Democracies in Europe as Measured by Current Indicators of Democratization and Good Governance," Journal of Communist Studies & Transition Poliitics 20, no. 1 (2004), 28-55; L. Diamond and L. Morlino, "The Quality of Democracy. An Overview," Journal of Democracy 15, no. 4 (2004), 20-31.

3. These are 11 East Central European countries, Chile, Costa Rica, Jamaica and Uruguay, South Korea and Taiwan, Botswana, Mauritius, Namibia and South Africa. We also exclude the special cases of Afghanistan and Iraq.

4. D. Nohlen, "Wahlen und Wahlsysteme," in H. J. Lauth (ed.), Vergleichende Regierungslehre. Eine Einführung (Opladen: Westdt. Verlag, 2002), 239-269.

5. D. Horowitz, Ethnic Groups in Conflict (Berkeley: University of California Press, 1985).

6. M. Bogaards, "Electoral System and the Management of Ethnic Conflict in the Balkans," in A. Mungiu-Pippidi and I. Krastev (eds.), Nationalism after Communism. Lessons Learned (Budapest and New York: CEU Press, 2004), 249-268; A. Lijphart, Democracy in Plural Societies: A Comparative Exploration (New Haven and London: Yale University Press, 1977).

7. J. T. Andrews and G. R. Montinola, "Veto Players and the Rule of Law in Emerging Democracies," Comparative Political Studies 37, no. 1 (2004), 55-87.

8. J. Kunicová and S. Rose-Ackerman, J. & S., "Electoral Rules and Constitutional Structures as Constraints on Corruption," British Journal of Political Science 35, no. 4 (2005), 573-606.

9. J. J. Linz and A. Stepan, Problems of Democratic Transition and Consolidation: Southern Europe, South America and Post-Communist Europe (Baltimore: Johns Hopkins University Press, 1996); F. Rüb, Schach dem Parlament! Regierungssysteme und Staatspräsidenten in den Demokratisierungsprozessen Osteuropas (Opladen: Westdeutscher Verlag, 2001).

10. A. Lijphart, Democracies: Patterns of Majoritarian and Consensus Government in Twenty-One Countries (New Haven and London: Yale University Press, 1984); W. Steffani "Parlamentarisch-präsidentielle—'Mischsysteme'? Bemerkungen zum Stand der Forschung in der Politikwissenschaft," in O. Luchterhandt (ed.), Neue Regierungssysteme in Osteuropa und der GUS. Probleme der Ausbildung stabiler Machtinstitutionen (Berlin: 2001), 11-62.

11. M. S. Shugart and S. Haggard, "Institutions and Public Policy in Presidential Systems," in S. Haggard and M. McCubbins (eds.), Presidents, Parliaments and Policy (Cambridge: Cambridge University Press, 2001), 64-104; M. S. Shugart and J. M. Carey, Presidents and Assemblies. Constitutional Design and Electoral Dynamics (Cambridge: Cambridge University Press, 1992).

12. M.G. Schmidt, Demokratietheorien. Eine Einführung, 3rd edition (Opladen: UTB, 2000), 321-4.

13. Cf. Shugart and Haggard, Op. Cit.

14. Rüb, Schach dem Parlament, 483.

15. W. Merkel and H. J. Puhle, Von der Diktatur zur Demokratie. Transformationen, Erfolgsbedingungen, Entwicklungspfade (Opladen: Westdt. Verlag, 1999), 60.

16. G. W. Cox and M. McCubbins, "The Institutional Determinants of Economic Policy Outcomes," in S. Haggard and M. McCubbins (eds.), Presidents, Parliaments and Policy (Cambridge: Cambridge University Press, 2001), 21-63.

17. Shugart and Haggard, "Institutions," Op. Cit., 94-6.

18. Cf. D. Rodrik, "The Paradoxes of the Successful State," European Economic Review 41 (1997), 411-442.

19. D. A. Rondinelli and S. G. Cheema, "The Competent State: Governance and Administration in an Era of Globalization," in D. A. Rondinelli and S. G. Cheema (eds.), Reinventing Government for the Twenty-First Century: State Capacity in a Globalizing Society (Bloomfield CT: Kumarian Press, 1997), 243-260.

20. S. Haggard and R. Kaufman, The Political Economy of Democratic Transitions (Princeton, N.J.: University Press, 1995).

21. J. Williamson and S. Haggard, "The Political Conditions for Economic Reform," in J. Williamson (ed.), The Political Economy of Policy Reform (Washington, D.C.: Institute for International Economics, 1994), 527-596.

22. S. Haggard and S. Webb, "Introduction," in S. Haggard and S. Webb (eds.), Voting for Reform. Democracy, Political Liberalization, and Economic Adjustment (Oxford: Oxford University Press, Oxford, 1995), 13 and 31.

23. P. B. Evans, Embedded Autonomy: States and Industrial Transformation (Princeton: Princeton University Press).

24. Cf. Andrews and Montinola, "Veto Players."

25. Cf. Haggard and Kaufman, Political Economy.

26. J.S. Hellman, "Winners Take All: The Politics of Partial Reform in Post-Communist Transitions," World Politics 50, no. 2 (1998), 203-254.

27. Ibid., 204-5.

28. L. Bruszt and D. Stark, Post-Socialist Pathways. Transforming Politics and Property in East-Central Europe (Cambridge: Cambridge University Press, 1998), 169 and 188.

29. J. Blondel and N. Manning, "Do Ministers Do What They Say? Ministerial Unreliability, Collegial and Hierarchical Governments," Political Studies 50, no. 3 (2002), 455-476.

30. P. Swianiewicz, Foundations of Fiscal Decentralization. Benchmarking Guide for Countries in Transition, Local Government and Public Service Reform Initiative/ Open Society Institute, Budapest.

31. World Bank, Entering the 21st Century. World Development Report 1999/2000 (Washington D.C., World Bank, 1999), 107-124; World Bank, Reforming Public Institutions and Strengthening Governance. A World Bank Strategy (Washington, D.C.: World Bank 2000), 24-25.

32. P. Hutchcroft, "Centralization and Decentralization in Administration and Politics: Assessing Territorial Dimensions of Authority and Power," Governance 14, no. 1 (2001), 23-53.