4 Institutions that Break Elite Political Power

Transcript of episode 2: 

Hello and welcome to the Rules of the Game podcast, where it is my job to discuss democratic institutions.

In this episode, I discuss four democratic institutions that can break elite political power. I call them, first, the constitutional, second, the sovereign, third, the localized and, fourth, the ignored democratic institution.

More specifically, the four institutions that I will discuss and compare are the following, first, the constitutional democratic institution. This is the electoral law. How do we select people to represent us in the most important political body in our countries, our parliament? Second, direct democracy. Do the people have veto power over laws and constitutions? And are they thus truly sovereign? Third, what I call the localized democratic institution, that is federalism. Is political power separated also vertically and across different territories in a country. And finally, the ignored democratic institution, that is executive councils or committees. So why don’t we use councils as executive governments to have more balanced decision making? I assure you that even if you are very familiar with democratic institutions, you will have learned at least one important or interesting aspect about them; something you didn’t know before. I will tell you how these four types of democratic institutions can be employed to give the people more control over the political process. They can balance each other and complement each other, and each of them can be a check on the other. They divide and decentralize power in different ways.

I am your host, Stephan Kyburz, and this is the second episode in my new podcast, the Rules of the Game, where is my job to discuss, analyze and compare democratic institutions from around the world? I’m a political economist with a PhD in economics from the University of Bern in Switzerland, and I previously held positions at the London School of Economics and Political Science and the Center for Global Development. I believe that the public discussion of democratic institutions is important and that people should take part in that discussion. I have decided to dedicate my time to contribute to that debate with my knowledge and my perspective. I strongly believe in the wisdom of the people and the power of knowledge. People should be more aware of the political institutions that govern their lives.

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The social struggle for democracy has always been a struggle for political power between different groups in society. This eternal struggle will never subside. Parts of society will always try to accumulate power to seek rents, whether it’s an emperor, queen, president, corporate elite or a group of oligarchs. Somehow, natural human behavior is to try to accumulate power and to get rich at the expense of others. But the stronger and more balanced democratic institutions are, the better the society is guarded against power grabs and the fairer the society can be organized.

The word democracy consists of two parts “Demos” and “Kratos”. In order for the demos, that’s the people, to have the Kratos, the power, democratic institutions are required to prevent the power grab by political elites. The discussion of these four important institutions shall give an overview of my understanding of how democratic institutions can work together and how they can balance each other. The discussion simplifies many aspects and makes shortcuts. For example, I don’t go into the details of the presidential and parliamentary systems of government, which are both super important and have different implications for power sharing in future episodes. So I will discuss each of these institutions in more detail and also provide more references to relevant papers and books. So democratic institutions should be designed and organized in a way to prevent the abuse of political power for private gain. So that means mainly putting a check on political factions, political elites, but also a check on the corporate elite, preventing them from trying thio sequence in an unfair way and by unfair rent seeking. I mean, for example, that big corporations try to influence legislation in a way that they end up paying a lower tax rate than small corporations.

There is this famous quote by the economist John Hicks, who said, the best of all monopoly profits is a quiet life. This means that a monopolist doesn’t have to worry about competitors who bring new products into the market. He/she can just set a high price on his products and earn a lot of rent on the product and have a quiet life. So he/she doesn’t need to worry, and I think there is an interesting adaptation of that quote. I would say the best of all democracy profits is a quiet life for its citizens. So if democracy is well designed, if institutions balance each other and check each other, then the citizens have a quiet life. Essentially, what you want is a government that is pretty much in the background and doesn’t bother you, but provides some safety when you need it. And so I think this is like an interesting comparison. The citizens should have a quiet sleep, essentially, if institutions are well built. So as citizens, you probably like institutions that you can fully trust and that, you know, are working in your interest, mainly a government that checks itself and is balanced. You don’t want to have to control and ask for transparency all the time. The best institutions, I think, are the ones that check each other and that even possibly check themselves. So I’m presenting here the institutions that I think are important and are capable of keeping elite political power and check. And I’m not talking about how to get to that institutional setup, which is a completely different story. But once in place how it keeps the politicians as agents of the people. The power is delegated from the people to the politicians. Yet the people should always have control over the political process.

Now let’s start with the discussion of the four democratic institutions that I think are able to prevent political power grabs and make democracies more balanced. So the first one is the constitutional, that is the electoral law. And I think it’s the most important institution in democracies anywhere around the world because it determines how parliaments are constituted, how representative they are. I call it the constitutional because it fundamentally sets the political trajectory of a country. Representation influences both constitutional and policy choices in fundamental ways, the better the representation, the better political decision will reflect the preferences of the population. The electoral law determines how representative parliaments are of the people. As many studies have shown proportional representation electoral laws produce better representations than majoritarian electoral laws. This will be a central topic in this podcast throughout, because it’s so important. It might seem very technical, but it is a crucial element of democracies. For instance, a first-past-the-post election system in single member districts, like we have in the UK or the US, produces poorer representation than a party list proportional representation, like we find in many European countries. Furthermore, elections have to be contestable. New parties should easily be founded and able to contest the elections. That means also that the new parties challenge the older parties, which creates a better dynamic among political actors in a country and that is also better possible in proportional representation electoral law systems.

Now you may also ask, what about the division of power? Isn’t the distinction between the legislative, the executive and the judiciary branch of government important as well? This is true. Yet since parliament is usually the only constitutional branch of government, strong factions in parliament can still control the other branches of government. The judiciary branch is usually elected by parliament and the executive, even in systems with strong division of power like in presidential systems, parliament can, in extreme cases, try and impeach the president. In many parliamentary systems, the prime minister depends on the confidence of parliament. So if the ruling coalition breaks up, then this will also be the end of term for the Prime Minister. Hence, the parliament is the most important institution. Even if we have a division of power either a week or a strong one, as in the US. So the legislative branch of government is the primus inter pares. That means the legislative branch is the first among equal branches in a division of power set up with an executive, a legislative and a judiciary branch. Still, the legislative branch is the primus, the primary branch. So if a country gets the parliamentary representation right, then already a lot is one in terms of democracy, because the parliament is the constitutional power in most governments around the world.

Now the second democratic institution that I want to discuss and I think is super well positioned to be a check on power grabs by political factions is direct democracy, which I call the sovereign. I call it the sovereign because it can be a strong check on Parliament. So in a democracy that includes a direct democratic institution, the people are sovereign and not essentially parliament itself. So, in democracies with a strong parliament without direct democratic possibilities, the parliament is essentially sovereign. Now direct democracy can have the following functions. Through, for example, initiatives, people can propose constitutional changes. The people can also approve constitutional changes that are proposed by parliament or government. It can be used to approve or reject legislation proposed by parliament. So this is essentially a veto power on parliament, and also sometimes it can prevent power grabs as the last defense line of democracy, when countries are sliding towards authoritarian control. So even if the whole of government, the three branches are already under control by authoritarian forces, direct democracy might be a last defense line. Now, how does the sovereign, as I call it, the sovereign institution relate to the constitutional institution. So fundamentally, what most people don’t understand about direct democracy is that direct democracy is a check on representative democracy. Direct democracy, like the people, can correct the course of parliament if the people think that parliament drifts away from the intended course. So if direct democracy is strong, the representatives in parliament will work in the interest of the people, will work harder in the interest of the people because they know through a referendum or initiative the people will correct their work. So they have the people in the back of their minds when producing legislation. It is, in that sense, a disciplining device for parliamentarians. Also, another important point is that the better representative democracy, the less important is direct democracy. So if parliament is a good representation of the people, they will already work in the interest of people. And, um, there’s less interest among the population to correct parliament, right? So if representative democracy works really well, then direct democracy can become pretty much obsolete then. Also, direct democratic institutions can have possible constitutional powers depending on how they are set up, so it can be a further check on the legislative branch and be a stronger check than the simple division of power. So even in a system of division of power with three branches of government, if all three branches of government are captured by political elites, then direct democracy can be a fundamental final check.

Now, if you have listened to the first episode of my podcast, you probably remember that I did that comparison between the US and Switzerland with regards to electoral reform. And I told the story of how in Switzerland, electoral reform was possible only because there was the institution of direct democracy that overruled parliament to introduce a proportional representation electoral law while in the US that institution is not available to the people, and the US has a first past the post system that protects the power of pretty much the Republican and the Democratic Party. And there is no way for the people to overrule parliament, even if maybe they want to. So even in Switzerland, the people had to initiate electoral reform three times and every time the parliament said no. But in the third attempt, the people (male population) finally figured out that electoral reform would make sense because it would make the Swiss democracy more balanced, more competitive, more inclusive. And finally it happened. And it was an important step in the development of democracy.

Now you may say that, well, Switzerland is maybe a special case because direct democracy has been a central element of the democratic institutions. That is true. Yet almost every country around the world at some point had a referendum over some either law or constitutional change. The difference is only that direct democracy in Switzerland is very well developed, while in many other countries it is not developed much at all. And for example, in the US at the national level, it is not available at all. The US is actually one of the few countries that never had a national, a popular vote on any issue. But even in the US, the founders of the constitution had to make fundamental choices on direct democratic institutions and representative institutions. Even (James) Madison, actually in the beginning thought of only direct democracy as a real democracy. And he called what we now call a representative democracy a republic. Now this terminology evolved over time and now we all consider representative democracy as the democracy, essentially. But they had to make choices on how much power to give to the people. And in the beginning, only the House of Representatives was directly elected by the people. All other branches of government were elected by the state houses or the Senate. The Electoral College, to elect the President, was initially elected by state houses and not by the people. The Supreme Court members are elected by the Senate and the Senators were also elected by the state houses. So there was really not that much control given directly to the people.

Next, I want to talk about what I call the localized institution, that is federalism. So federalism is the division of power among different tiers of government in a vertical sense, so the national level, the regional level and the local level. So usually most federations have three tiers of government, but essentially you could have more tiers or only two tiers. Public goods provision should be organized in federal states by the principle of subsidiarity. The subsidiarity principle means that public goods are provided at the lowest possible level. This essentially allows to produce the local public goods according to local preferences. But this I will also discuss in a separate episode, where I will talk about federalism in general. So government units in a federal system of government should be relatively independent, either at the state or the local level, and have created their own laws and even constitutions in a federation. Any unit should essentially be allowed to leave the federal union. So by threatening to leave the union, this creates a check on the federal government as well.

But how does federalism link to the first two institutions that I discussed, the constitutional and the sovereign institution. Well at every tier of government, you want the best possible representation of the population. A better representation at each level improves the decisions taken by parliament and prevents power grabs by political elites or political factions. And this you achieve also through proportional representation, even though at the local level, an election of specific personalities, specific politicians, might be an option as well. So I think proportional representation is more important at the higher levels of government. Second, at every tier of government, you’d like to have the veto power of the people to correct wrong choices made by representative bodies of the population. So if you have the check of direct democracy on parliament at every level, parliaments are more likely to work in favor of the general population. Constitutional changes can also grow from the grassroots. For instance, changes in electoral laws can first be implemented at the local or state level, so federalism can be a means to have democratic innovation or reform, and the federal structure explicitly allows for that experimentation. And we’ve seen this with electoral reform for example in Switzerland, but also just the US and I will discuss, obviously, many other countries in the journey of the podcast. Just the US constitution has been so influential, so it’s a good reference point.

Federalism thus balances centralized and decentralized power. So a strong local governance takes away pressure from the central government. Federalism provides stability, and it’s like a safety mechanism when the central government experiences a power grab. We’ve seen this during the last US elections when the state governments provided a check on the central, the federal government in the US. You all know the story, and it might very well be that federalism prevented further harm in the US democracy in the recent elections. So especially in countries where governments are sliding towards authoritarian control, federalism can be a last defense line as well.

Finally, I want to talk about the executive councils and I call it the ignored democratic institution because nobody talks about it, and only Switzerland and San Marino are actually using that kind of democratic institution. And of course you might think now, okay, he again talks about Swiss democratic institutions. Yet, these institutions have essentially played important roles throughout history and that’s also why I call it the ignored, because I think this type of institution deserves more prominence. So how do executive councils work? Essentially, they are a different form of executive government where decisions are made in a collegial way. So each member in the council has the same voting power. So instead of a cabinet where the prime minister is usually above the rest of the cabinet, in an executive council, all members have the same amount of power, usually called executive councils or committees. They also have a president, but the president doesn’t have more power than the other members. He or she is, in that sense, a primus inter pares. That means he/she is the first among equals. Same as I mentioned before, the legislative branch of government is also first among equals. In the case of Switzerland this executive council is called Federal Council, and it has been inspired by the institution of Pennsylvania of 1776, that had a 12 member supreme executive council between 1777 and 1719, and Benjamin Franklin served on the council and was also for some time its president. This Pennsylvania Constitution also most likely inspired the French Constitution of 1793 during the French Revolution. So France had also an executive council during the years 1795 to 1799 consisting of five members, and it was called Directorate until Napoleon’s coup d’état, and he replaced it by the Consulate, but which was much more authoritarian and which ended the French Revolution. Interestingly, also the founders of the US federal constitution thought about having an executive council. So instead of a president in the New Jersey plan, which was one of the proposals for the US Constitution included an executive council, as I said, currently only Switzerland and San Marino and, to some extent, Bosnia and Herzegovina have a council consisting of several persons with equal voting rights to make decisions in government. Also, Uruguay had a nine member executive council in the period 1952 to 67; with the collegial body serving for a fixed term. Obviously, an executive council could be either elected by the people or indirectly by the parliament, as is the case in Switzerland at the federal level. Yet again, Switzerland at the cantonal level also has executive councils as executive governments, and these are most often elected directly by the people.

So again, the question is how does this institution relate to the other institutions that I’ve discussed? I think that would need more time and that I will, for sure, do at least one episode on executive councils. But what I can say is that the institution of the executive council is an additional check on the legislative branch of government, but it also depends on how it is elected. If the executive Council is elected by the people, then it is a very strong check on the legislative branch of government, and also the executive council, in that sense is a better representation of the people because instead of one president, you have several members elected by the people. If, on the other side, the executive council is elected by the parliament, as is the case with the Federal Council at the national level in Switzerland, then you still want to have either a good representation in parliament or strong direct democratic institutions to prevent the capture of the government institutions by strong political factions. All right, let me wrap up the discussion of the four institutions here, and I hope it was insightful and maybe provided a new perspective on some of the institutions, and especially two of them. The direct democracy and executive councils are not used very often around the world, and I’m sure in many countries they could be considered or further developed.
There is one more important point that I want to make in this episode. Namely that these different institutions, they balance each other. It’s like a play. So if one institution is weak, then the others will become stronger. And so the better they are balanced, the more they are also a strong check on power grabs by political affections. So let’s say if parliament is a bad representation of the people, then direct democracy has a more important role in correcting the decisions taken by the parliament or even can initiate constitutional changes to correct the bad representation in parliament. Furthermore, obviously, you can also think of that balance between the central government and local governments. But I will of course discuss all these for institutions in more detail in future episodes, and they’re gonna be kind of like a benchmark of my discussions with guests.

All right, thanks a lot for listening and please subscribe to the podcast. That’s the best way of supporting my work, and you can find, as mentioned, the show notes and a transcript of the episode at rulesofthegame.blog.