Wednesday, November 16, 2011

Technocrats and democracy: Have PhD, will govern

Economist
November 16, 2011

The markets first welcomed, then worried about the appointment of academic economists as prime ministers of Greece and Italy. Much political commentary traced the same trajectory. But the technocratic response to the euro’s problems is only part of a wider reaction to the financial and economic crisis: in many countries, the crisis has paralysed significant parts of the political system, leading to innovations and improvisations that try to short-circuit or patch up the normal working of democracy.

Perhaps the best example of this is the so-called “super committee” in the United States. Normally, all fiscal decisions are made by Congress, with the approval of the president. But by November 23rd, a special committee made up of three Democrats and three Republicans from each house of Congress, has to slice a mammoth $1.5 trillion off the budget deficit over ten years. Congress must then vote on whatever the super committee proposes—but may only accept or reject the plan as a whole. It may not amend the plan or vote on individual items, as is usual. And if Congress rejects the package, or the super-committee fails to come up with one, then the $1.5 trillion of cuts will be imposed automatically. American politicians, despairing of their inability to reduce the deficit in normal ways, have put a gun to their own heads. There have been partial precedents in American history but nothing quite like this.

In Europe, meanwhile, technocratic prime ministers are only the highest-ranking experts being recruited to help balance budgets and reform economies. Italy not only has an economics professor as prime minister (Mario Monti), it has also agreed that the IMF should scrutinise its reform programme. Greece has accepted that a troika of the IMF, European Central Bank and European Commission (the European Union’s glorified civil service) should supervise its austerity measures. So have Ireland and Portugal. Spain is an especially revealing case. On the face of it, its democracy is working as usual. The country is due to hold an election on November 20th and, if the polls are correct, the conservative Popular Party will unseat the ruling Socialists. Yet at the same time, the current government has agreed upon a series of economic targets with the European Commission, and in practice the PP’s leader, Mariano Rajoy, will have to take these targets as a guide to policy, even if he dislikes them (which, admittedly, he doesn’t).

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