In his candidature — and also in his nomination speech — Mitt
Romney has been given a unique opportunity to transcend narrow U.S.
politics and set an example to Western statesmen. Due to a crisis
of credibility and a rise in the politics of patronage, the speech
comes at a time when the quality of democracies on both sides of
Atlantic is at a low point. And the U.S. presidential election is
probably the only political event in the world that has the power
to reverse that decay.
What exactly is the root of our troubles? Traditionally, in
advanced democracies, candidates competed on their policy
platforms, whereas in places like Brazil, Mexico or Ghana,
politicians would buy votes in exchange for favors. Those could
range from $7.50 gift cards, as in the recent Mexican presidential
election, to entitlements, jobs or subsidies for specific
groups.
The reason is simple. In well-governed countries, politicians
can credibly promise policies that are in the general interest.
Voters then tend to elect the platform that offers the most
appealing bundle of policies and public goods. In contrast, in
places where politicians’ promises are generally not trusted,
political competition is dominated by patronage. As a result,
politicians promise special favors to intermediaries – “patrons,”
or “godfathers” — who then mobilize the needed political support
amongst the voting public — the “clients.”
The developing world is rife with examples of direct vote buying
or in-kind handouts to supporters of particular parties. But,
sadly, the politics of patronage and clientelism have been making a
comeback in the United States and Europe too — in subtler forms,
but with potentially disastrous effects nonetheless.
Take an extreme example — Greece. Since the end of the military
dictatorship in 1974, the two dominant parties in the country have
essentially monopolized the political arena, distributing rents,
privileges, and publicly-funded largesse in exchange for political
support. It is widely known that practically all jobs in the public
sector are given to people loyal to PASOK and New Democracy —
known also as the “green” and “blue” children.
Patronage also accounts for the rise in public sector employment
— from a little over 740,000 government jobs in 1985 to over 1
million in 2008, while the country’s population changed only
modestly over the same period. Throughout this period, labor costs
rose much more rapidly than anywhere else in the European Union,
mostly because the successive governments used pay rises as a tool
for building popularity.
Lack of credibility, and the resulting use of patronage and
clientelism, is precisely what makes Europe’s fiscal crisis so
deep. In spite of repeated bailouts and commitments to slash
spending, Greek debt is now at 165.3 percent of the GDP, compared
to 145 percent last year. The new cabinet of Antonis Samaras has
yet to push through the 11.5 billion euros of cuts that have been
demanded by the country’s creditors. Wish him luck.
The point is that Greece is not alone in lacking leaders who can
govern in the public interest. Greece is just an extreme example of
the deficit binge that has been driving public sector behavior in
France, Italy, Portugal, or the United Kingdom for decades. With a
few exceptions, public debt in advanced industrial economies has
been growing to historically unprecedented levels over the recent
decades.
What is the reason for this growth? Neither wars nor financial
crises, but simple political convenience of using debt to fund
transfers to political constituents. Even in fiscally prudent
Germany, notes a 2011 Geneva Report on the World Economy,
co-authored by Barry Eichengreen and Charles Wyplosz, “the ratio of
spending on transfers and subsidies rose by 9.5 percentage points
of GDP between 1970 and 1995, while total revenues increased by
only 6.1 percentage points.”
Worse yet, the United States suffers from the same problem. The
vote-buying scandal in July in Kentucky is only a sad joke when
compared to the big-picture patronage and clientelism pervasive in
the nation’s politics. Think about the country’s agricultural
subsidies, auto bailouts, and entitlements such as Medicare. It is
no coincidence that Paul Ryan’s plan to reform Medicare is being
met with a mixture of hostility and disbelief. For those whose
political success depends on buying the votes of the elderly in
exchange for targeted favors, attempts to turn Medicare into a
private healthcare insurance plan are simply not palatable —
regardless of whether Mr. Ryan’s plan has any chance of
success.
The inability of Western political elites to address their
countries’ fiscal woes is a sign that our politics revolves more
than ever before around patronage and clientelism, and not around
responsible policymaking. To turn the tide, we need a profound
transformation of how day-to-day politics operates, and we need
leaders who can do more than promise (and deliver) lollipops to
their constituencies. But can Messrs. Romney and Ryan stand up to
the challenge?
