East overtaking West in global race to reinvent the state

opinion August 16, 2014 01:00

By Kiertisak Toh
Special to The

In October 2013, the government of the United States, the most powerful democracy in the world, had to shut down for two and a half weeks because it could not agree to pass a budget law. It was a prime example of political paralysis and dysfunctional gove

A large segment of the American public is resigned to more of the same, believing that nothing will change at the level of national government in the foreseeable future.  
A new book, “The Fourth Revolution: The Global Race to Reinvent the State”, by John Micklethwait and Adrian Wooldridge, both of the Economist magazine, challenges this view of hopelessness and discordant apathy. They argue that the 21st century is turning out to be a challenging one for Western-style democracy and government.  
However, they see hope and argue that reform to reinvent the state or government is happening. They believe we are now in the midst of a “Fourth Revolution”. 
The authors take us through the historical progression of what they describe as three great revolutions and a counter-revolution – a half revolution – and onto our present Fourth Revolution. The historical evolution began with the creation of the nation-state to provide security and law and order as a means to escape never-ending civil wars in Europe. This was followed by the second revolution – against corruption, patronage and cronyism – which led to a greater emphasis on liberty, efficient government and freedom from state interference. This gave us the classical liberalism of the 18th and 19th centuries. Liberalism was followed by what the authors consider the third revolution in the early 20th century: the rise of the welfare state. This was underpinned by the belief that the state has the responsibility to deliver a “basic minimum” of welfare to its deprived citizens. Over time, the welfare state grew into “big government” and the state began to overextend itself. By the early 1970s the welfare state was failing. This gave rise to the counter-revolution of Reagan-Thatcher in the 1980s – a “half-successful revolution”, according to the authors. 
Against the backdrop of high-profile political gridlock and dysfunctional government in Washington, the authors point out the revolutionary change that has been taking place at state and local government levels, such as in California and New York City. 
California, famous for its dire fiscal situation, money politics, gerrymandering and extreme partisanship, is an example of reform that has begun to turn around the fiscal situation at state level. It has enjoyed a budget surplus in recent years. Other successful and promising cases of government reforms have been taking place in countries like Sweden, India, Singapore and China. In Asia, for example, India is exploiting and exploring digital and information technology to improve effectiveness in public healthcare delivery and hospital management. In Sweden, the government rethought its approach to the welfare state and reformed its tax and expenditure policies. It changed the delivery of social services, adopting a more market-oriented approach with private-public partnership. It made use of independent expert commissions for advice as a way to constrain the influence of vested interests and to build consensus.  
The US and Europe no longer have a monopoly on ideas when it comes to political innovations and reforming government, the authors write. Now there is competition from all corners of the globe, where different ideas and alternative thinking is reaping rewards. Western-style democracy has a credible challenge from the “Asian Alternative” exemplified by China and, especially, Singapore, with their emphasis on meritocracy, efficiency and accountability. US-based NGO Freedom House consistently ranks Singapore one of the world’s freest economies and names it partially free in terms of political rights. Historical context, values, culture stability and social order matter strongly for the “Asian Alternative”, sometimes at the expense of individual liberty.  
The authors prod us to rethink the broader question of what the state or government is for? To this we might add a related question: Who is the government?  
Government is all of us. If “government is not the solution, it is the problem”, said former US president Ronald Reagan. In this case, all of us – politicians (including presidents), voters and individual citizens – are the problem. Micklethwait and Wooldridge remind us that voters are happy to embrace “small government” revolution when it means lower taxes, deregulation and shredding red tape, but not when it means receiving fewer public services. Politicians respond to what voters want.  
The authors make the case that significant government reform is possible, and history and reality is on their side. I was reminded of an observation made by Herbert Stein, the chairman of US president Nixon’s Council of Economic Advisers: “If something cannot go on forever, it will stop.” Micklethwait and Wooldridge point out that large public expenditure with no increase in taxes brings rising national debt that cannot go on forever. In their view, the Fourth Revolution has already begun.
The challenge for the West in this “global race to reinvent the state” depends more on how the West learns and integrates what works from the Asian Alternative (and Nordic models), than on trying to change the rest of the world to conform with the Western image of democracy. Individual countries’ historical context, culture and values do matter.  
Emerging and developing countries are no longer looking to made-in-the-USA dysfunctional government and muddling-through Europe as an image of meritocratic, effective and accountable government. 
Dr Kiertisak Toh is Senior Fellow at the Duke Centre for International Development, Sanford School of Public Policy, Duke University, North Carolina, and at the 
Economics faculty of the College of Business and Economics, Radford University, Virginia.