The health of democracy in the developed world

An essential starting point needs to be the recognition that democracy today is in a precarious state, and even G7 countries themselves often fall short of the liberal democratic standards and rules-based orders that they claim to espouse. As chronicled in surveys, reports, and other research, over the past decade, the quality of democracy has been in steep decline, including in some of the oldest and wealthiest democracies in the world, like the UK and the US, and its promise needs revival.

Covid-19 has laid bare frailties in the social contract that have been developing since at least the 2008 financial crisis. Widening inequalities between and especially within countries, often manifested around overlapping and reinforcing group-based identities (including ethnicity, race, gender, geography, language and disability), have created imbalances in access, voice, representation and opportunity that disenfranchise segments of the population and undermine trust in democratic institutions.

There is an intense frustration with ‘politics as usual’: political elites that are seen as irredeemably corrupt and out of touch, and with political systems that, while ostensibly democratic, are perceived as dysfunctional and unable to deliver on the needs and aspirations of their citizens. Innovations in information and communications technologies have intensified these struggles. While they offer the potential to bring people together to address collective problems as never before, the growing ability of people to share and disseminate their views without the need for intermediaries, the proliferation of feedback loops and the sheer pace of technological change has also intensified fragmentation and polarisation making problems seem more complex and intractable .

There is an urgent need to revitalise democracy and the social contracts linking states and citizens. People are angry, and they want to be included – in terms of both whose voices are heard in decision-making processes, and how the benefits of development and prosperity are distributed. The challenge is not simply about championing 'open societies' anchored in democracy and human rights, important as that is. It is also about how democracies can respond to and address the critical needs and demands of their people in more equitable ways.

Democracies are by no means the only political systems that can fulfil core state functions and provide services – and as we have seen, more authoritarian models of stability and development have become increasingly appealing, especially in light of China’s remarkable socio-economic success.

If democracy is to prove resilient over time, it must not only uphold rights and freedoms, hold power holders to account, and enable people to participate in decision-making processes that affect them, it also has to deliver. This is by no means straightforward: as we know from history, fostering more open societies and more inclusive development together is an extraordinarily complex challenge.

A new Cold War?

Thinking beyond the confines of established democracies, it is worth heeding Francis Fukuyama’s argument that political development tends to advance along three different tracks: rule of law, state capacity and political accountability (of which liberal democracy is just one possible expression). Very rarely do all three progress simultaneously, a point also made by James Robinson and Daron Acemoglu, who note the historical rarity of societies finding their way into a ‘narrow corridor’ from which emerge powerful states ‘shackled‘ (to use Acemoglu and Robinson’s phrasing) by popular or rules-based accountability.

Other countries are pursuing their own paths. China, in particular, has developed a form of non-liberal governance that has proved extremely effective in addressing many basic human needs. It is now a major player on the world stage and its model is perceived by some in international policy circles as a threat to Western liberal democracy. There is talk of a new bipolarity in global affairs or even a new Cold War, with the West in particular concerned about keeping in check the expansion of China or other non-Western economic and military powers.

A more fruitful way of looking at things is to ask what the West could learn from China, and what China could learn from the West. A dialogue conducted in a spirit of mutual respect and tolerance seems preferable to insisting on the superiority of one system over the other. Whatever one’s instincts on these matters, it is clear that pressing global problems, from infectious disease control to climate change, will not be solved without better global cooperation. Here, it is worth noting that a framework for international cooperation already exists: the Sustainable Development Goals (SDGs), including SDG 16 on ‘inclusive and effective institutions for all’, which all the world’s major states have felt able to sign. These global goals build on a longer history of international norms, regulations, and organisational developments regarding issues ranging from human rights, transparency and open government, to anti-corruption, money laundering, and human trafficking.

From promoting democracy to working with political settlements

Viewed through a Cold War prism, we are caught in an ideological struggle between China and the West, and between the presumed merits of authoritarianism versus democracy. But thinking in terms of binary regime types does not help the cause of global security and prosperity.

If the G7 genuinely wants to assist low income countries build back better post-Covid, it would do better to focus on how economic, social and political development challenges are shaped by country political settlements.

Political settlements are more or less explicit agreements among powerful groups about the basic rules of the political and economic game, and the distribution of benefits therefrom. As recent research shows, the nature of a political settlement – including the breadth of its social foundations and the degree of power concentration – shapes its ability to solve collective action problems around health, education, economic growth, women’s rights, disease control and global warming. These dimensions drive elite commitment and state capacity for inclusive development.

In some settlements the state will already be responsive to the majority of the population and have fairly strong capabilities when it comes to addressing collective challenges, though policy blindspots and marginalised minorities may remain. Other states will be motivated to deliver benefits broadly, but lack the capability to do so except through patronage or populism. In yet others, elites may be essentially uninterested in sustainable development, or elite commitment and state capacity will be lacking.

With the right kind of politically smart, locally led approaches, international development actors can do much to deliver resources and nudge in-country reform in more progressive directions. Here, traditional democracy strengthening programmes should be regarded as just one instrument among a wider set, to be judiciously applied and adapted as the political settlement context allows. On rule of law support, meanwhile, purely legalist approaches miss the point that rule of law gains are fundamentally about elite actors opting for rules-based constraints on the exercise of political and economic power in exchange for less violence and instability.

G7 leaders could also do much more at a global level to change reshape the incentives that currently encourage predatory and violent leaders all over the world, including reforming extractive industries, better regulating offshore tax havens, rethinking strategies to tackle the trade in narcotics, and penalising unethical business, including arms sales.

Incentives can also be shifted by making aid flows more generous and less tied, providing leaders in low and middle-income countries with a real alternative to predatory behaviours that threaten not just their own populations but the world. While most G7 countries will come to the G7 summit – led by the UK - in June having increased their own international development assistance budget, the UK has made radical cuts to its own. The UK public tends to be in favour of this temporary cut, yet overall support for aid remains high. This provides a promising foundation for using aid to solve global problems in the future.