Is democracy in decline?

Today, only 4.5 percent of the world’s population live in fully-democratic countries, according to The Economist Intelligence Unit’s Democracy Index. About 45 percent live in flawed democracies, while 33 percent are subjects of authoritarian regimes.

Some of us have been brought up with the accepted wisdom that, starting under the ancient Greeks, democracy has been the best system in the world. Indeed, among the top 10 most competitive economies in the 2016 IMD World Competitiveness Rankings, only two economies (Hong Kong and Singapore) are not full democracies.

{mosads}Yet the data show that, today, the world is less democratic than it was 10 years ago; the countries with the most improved competitiveness levels the last 10 years—Singapore and the UAE—are non-democratic. These two nations are role models for many public-sector officials around the world.

In “Against Democracy,” Georgetown University’s Jason Brennan highlighted voter ignorance as one of the major pitfalls of modern democracies. He classified voters into three categories: hobbits, hooligans and vulcans.

Hobbits do not bother to learn about politics and, therefore, vote in full ignorance. Hooligans follow their party with the devotion of sports fans and adhere to certain principles irrespective of both past performance and future plans. Finally, vulcans are a significant minority of people who behave rationally, gather data and vote with full information.

Unfortunately, because of the dominance of hobbits and hooligans, democratic outcomes are not only unrepresentative of the majority’s true views, but also wrong and damaging to the common good. You can, in fact, argue that when there are massive demonstrations in the United States opposing a recently elected president, people are protesting against a dictatorship of hobbits and hooligans.

True democracy, a system in which all those affected by a political choice are involved in the decision-making process, does not exist anywhere. In fact, there is no reason why only citizens above 18 years of age should be allowed vote.

Moreover, since the outcome of the U.S. presidential election affects all world citizens in one way or another, the entire globe should have the right to vote in it. Another unfair aspect of voting is that, in many instances, we punish or hinder the choices of future generations, like when we vote on the pension policies of people who are not yet born. 

The Brexit vote may have been a rational decision by well-informed individuals, but it certainly restricts opportunities for many U.K. citizens who will be unable to access a larger European market in the future; and nobody has asked them.

Democracy is also a very slow decision-making process. The Swiss system is the best in terms of popular participation and representation, and decisions are accepted because direct democracy is implemented everywhere. However, agreements take time — sometimes too long.

A good example of this is a 16-kilometer rail line designed to connect downtown Geneva with France. It is estimated that the project will be completed by December 2019. However, the original project dates back to 1850, and its construction began in 1912! Such a massive delay has been caused by the difficulty of gaining consensus with all of the stakeholders involved.

Interestingly, we previously accepted that democracy is, by nature, redistributive, and, therefore, protects the lower class against the excesses of any ruling minority. However, this premise was recently proven wrong by Doron Acemoglu and James Robinson in a 2013 research paper titled, “Democracy, Redistribution and Inequality.”

The large, longitudinal study of more than 100 countries showed that democracy does not seem to have any significant effect on income inequality. On the contrary, inequality tends to increase under democracies when the economy has already undergone a significant structural transformation, when there is high land inequality, or when the gap between the middle class and the poor is relatively small.

Therefore, we can only claim the triumph of democracy if we acknowledge the problems of any of the alternatives. Dictatorships rely on a random allocation of political leaders. Countries can be lucky to end up with a benevolent dictator (the UAE, Singapore) who possess noble intentions and selfless policies; but this is rarely the case (North Korea, Equatorial Guinea). More times than not, dictators are not accountable for the common good (China, Saudi Arabia).

Alternatives to democracy should be more corrupt systems, but this is not always the case, either. The supporting group of a democratic leader has to be, by nature, large and, therefore, difficult to please. This group is what Bueno de Mesquita and Smith call “the essentials,” or, the winning coalition, in their book, “The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics.” 

The authors claim that, in any political system, there are three important political groups to consider—the interchangeables, which include any person with some say in choosing the leader (in a democracy, those who can vote); the influential, who truly select the leader (in a democracy, those who actually vote); and the essentials, whose support truly matters (in a democracy, the ones who vote for the winning candidate).

The less democratic a system is, the smaller the latter group is, and, therefore, the less corrupt the system because it needs to only ensure the financial satisfaction of this group. Tellingly, the ten most corrupt economies in the 2016 IMD World Competitiveness Ranking are indeed democratic countries.

While most cherish democratic countries as exemplar places to live, looking in-depth at the competitiveness of nations paints another picture. As a researcher in this area, I could not recommend that any country, especially a new country, seek to be democratic at all costs; especially when one takes into account some of the seismic outcomes that democratic processes have given us over the past year.

Arturo Bris is a professor of finance at IMD Business School and directs the IMD World Competitiveness Center in Lausanne, Switzerland. The Financial Times ranked IMD as the best in providing open programs, worldwide, the last five years. Bris ranks among the top 100 most-read finance academics in the world. 

The views expressed by contributors are their own and not the views of The Hill.