CIPE-NSD Open Forum: Defending Liberal Democracy in Emerging Markets

01.30.2017 | CIPE in News | Greg Lebedev |

“The Deterioration of Democracy: Out of Sight, Out of Mind”

Full Event Audio

Keynote Address

Let me welcome everyone to a very timely conversation about the state of so-called liberal democracies and the role of free markets in their success and survival. As part of today’s event we are pleased to introduce you to the Free Enterprise and Democracy Network, whose members will be leading our panel discussion.

Since the heyday of global democratic expansion in the 1990s, we have seen a wave of changes if not challenges to democracy in all parts of the world. And, these conditions are causing to us to reflect upon the nature of democracy, the effectiveness of its institutions, its vulnerabilities and its strengths – and, maybe most importantly, the conditions of the societies in which they function.

The rise of “illiberal democracy” is becoming a frequent topic of discussion. We can see it (or we think we see it), so we talk about it. However, my real concern is about the “deterioration of democracy,” which is an invisible and incremental process by which democratic institutions themselves are first the cause and later the victim of social and economic neglect.  It’s a precursor of illiberal democracy. Put another way, illiberal democracy is not the result of a coup, but it can be a consequence – a serious consequence — of deeper social ills, many years in the making. So, if democracy is allowed to deteriorate in the first place – especially in nations with limited experience with democratic institutions, weak constitutional foundations or insufficient checks and balances — we are inviting more than illiberal democracy, we’re flirting with some form of autocracy that, as we know, is no friend of free societies.

When we look at sovereign governance around the world we easily identify the classical extremes: democracy at one end – good; authoritarianism at the other end – bad. But, we must also remember that most of the world, for most of history, was governed – not necessarily well – but governed by strong-man rule. Authoritarianism prevailed. And it’s only in the last 300 years or so that democratic ideals – citizen engagement, public accountability and consistent rule of law – emerged as sustainable ingredients of governance. Yet, even within the last fifty to one hundred years we’ve fought multiple wars the purposes of which were to resist the recurrence of those bad old tendencies.  And, of course, today, those bad old tendencies continue to prevail as undemocratic autocrats litter the global landscape.

That said, all of us in this room know that democracy is rare, and it’s not easy to embrace . . . but more worrisome is that it appears to be more difficult to sustain than anyone thought.

Comfortable people – Europeans and Americans, most notably, and a handful of others – take a lot for granted, including democracy. Worse, until recently, many in the world misunderstood the meaning of elections. We believed (because we wanted to believe) that an old fashioned, reasonably fair election meant that all is well, when in fact election results were occasionally what they were always intended to be – signals (sometimes late signals) from the electorate about the state of their society, or in some places, the condition of their democracy.

However, the problem we’re discussing today – the growing popular anxiety with “illiberality” in various forms and in various places, such as Hungary – is slightly misleading because it can be just the tip of a governance iceberg.  Illiberal regimes are reasonably visible, but “democratic deterioration” is not.

The deterioration of democracy is a subtle function of neglect and indifference. Some mix of economic weakness and social ills are permitted to exist and fester over time . . . because they’re usually out of sight, unpleasant to confront and hard to fix.

And the result is a tragic erosion of belief in if not disdain for once-trusted democratic institutions – those very entities that should have paid more attention.

Now, both of these conditions are pernicious. They’re cancers – but illiberality is a mid-stage cancer and a little harder to treat, while “democratic deterioration” is an early stage colon cancer with both positive and negative features. The good news is that although democratic deterioration is invisible to many it progresses slowly and that incremental pace gives governments and societies time to mid-course correct and address the conditions that are the cause of the public dissatisfaction.

So what’s the bad part? It’s the flip side of incrementalism. Because it’s slow, it can go unnoticed because democracies tend to be comfortable places and don’t take tears in the social or economic fabric seriously . . . until it’s too late. The US financial meltdown of 2007-08 actually began with Executive and Congressional support for sub-prime mortgages a decade before. But no one really noticed that it had metastasized . . . until it was too late. We were all doing well . . . until we weren’t.  And Brexit, regardless of your opinion about the event, is the direct result of the incremental migration of sovereign regulatory and judicial institutions to a multinational authority.

So what’s our job? We’re not political or social scientists whose task is merely to explain, chronicle and lament current conditions. Our job – CIPE, NED and others — is to correctly diagnose the problems of democracy and act to address them around the world.  So, what have we discovered? Why are so-called illiberal political movements in Europe on the rise? Why are young people in a diverse set of countries expressing skepticism about democratic institutions? That’s what we must figure out. Others describe these conditions or consumer attitudes by using such words as “dissatisfied,” “angry,” or “disaffected” – and all those words fit, but they still don’t explain why. Something seems to be missing in too many democratic societies today . . . and this missing thing is causing serious social heartburn, and I would bet these conditions have been simmering un-noticed for quite some time.

And here enters CIPE, because we believe that at the root of these attitudes and this dissatisfaction are broken economies and sub-economies and long-failed economic remedies which CIPE has been confronting for more than three decades. Whether it’s the relentless stagnation of socialism, the inequities of crony capitalism, the corruption of kleptocracy, or the economic dislocation that can be a byproduct of trade, technology and productivity, these unsatisfactory or disruptive conditions – to varying degrees and in various places – are compounded by the failure of governmental institutions or their fascination with social experimentation at the expense of the greater society. In too many places, prime ministers, parliaments, courts, the press and even the church have in one way or another failed to acknowledge the existence let alone address the causes of this discontent. And, in my view, democracy will continue to deteriorate if “trusted institutions” continue to ignore these invisible but very real economic and associated social needs of the majority of its citizens.

We have a special responsibility. Most folks sell insurance, or teach school, or build things, or just work hard at leading their lives. But the deterioration of democracy is our job – and we must figure this out. We must constructively communicate not just problems but solutions and it’s CIPE’s job to help re-build or strengthen those democratic institutions that directly impact the economic well-being of societies, big and small. When academics discuss the de-construction of democracy, we must remind whoever will listen that CIPE is in the business of re-constructing democracies, piece by piece, and it all begins with those institutions that permit market economies to work and societies to flourish – which, in turn, permit a climate for democratic governance to exist. And, wherever we’re successful we will have removed at least some of the conditions that contribute to the eventual appearance of illiberal regimes or worse.

It is for these very reasons that CIPE helped form the Free Enterprise and Democracy Network (FEDN) to promote international engagement around the principles of free enterprise and democracy. Since 2012, this unique economically oriented Network has acted with CIPE to promote its principles of pluralism, participation, rule of law and public accountability. The network’s experts provide technical advice to market reformers in countries that are attempting democratic transitions. The network also brings economic reform perspectives to international forums, such as the Community of Democracies and the World Movement for Democracy. FEDN currently has 46 distinguished members from 33 countries and three of them are with us today and I’m particularly anxious to hear their observations upon the troubling conditions we’ve just discussed.