Can governments cope, in the sense of getting their arms around big issues?
Looking around Canada – but even more, abroad – raises that question. At a time of deficits and debt, matched against citizens’ expectations and demands, governments are struggling. And that struggle will continue.
Across Europe, the burdens of deficits and debt are straining social fabrics. Countries such as Britain, Spain and Italy face secessionist movements; far-right parties are growing; Greece seems to be near a breaking point. Yet the European Union can’t get a grip on its economic challenges or its governance.
Indeed, it’s governance that seems decidedly creaky, if not broken. Europe is an obvious case in point, but so is the United States. There, an 18th-century model of government – with its division of powers, ultra-strong Supreme Court and moneyed interest groups – seems incapable of remedying the country’s deep fiscal dilemmas.
Congress, whoever wins the presidency, is still divided and dysfunctional. Even if some temporary solution is found to raise the federal government’s borrowing limit (again) and an agreement is reached to avoid the spending cuts and tax increases that will automatically occur after the election – thereby plunging the country back into a recession – the longer-term resolution of the fiscal issue requires compromise of a kind not seen in years in Washington.
In the U.S. and, to a lesser extent, Canada, politics has become more polarized, principally because the forces on the political right have become even more dogmatic in their ideology, according to many studies of public opinion. Certainly today’s Conservative Party is more ideological than the previous Progressive Conservative Party. And today’s Republicans are long removed from even the party of Richard Nixon.
Shortly after Americans choose their president, a new Chinese leader will emerge, surrounded by a cohort of newly empowered colleagues at the Communist Party Congress. There’s no democracy there, but governance remains a long-term challenge for China. How does one party keep a tight grip on an economy slowly becoming more market-oriented and with technology allowing more and more citizens to inform themselves? The answer is that the grip will somehow have to loosen, and that will pose challenges for the all-powerful party. Again, governance.
Here in Canada, in a very decentralized federation, Quebec secession has again reared its head, although the chance of secessionists consummating their dream seems remote. More worrisome, Canadian federalism has been unable to get its arms around modernizing its health-care system so it doesn’t continue to bleed so many resources away from more future-oriented investments. Nor does it have anything remotely resembling a coherent strategy for handling energy and the environment, where, instead of being a world leader, Canada is a straggler.
Put the governance challenge another way. The private sector is very strong in and across many countries, but it can’t operate properly if governance doesn’t provide sensible and enforceable rules. For all the anti-government rhetoric businesses sometimes emit, business needs good governance.
The 2008 financial collapse, from which we’re still suffering, sprang from the alliance of greed and hubris. These old friends were allowed to wreck economies because the governance of financial institutions and their playgrounds was so weak, except in Canada. And few countries have been able to reverse the trend toward greater income inequality, which worsens competitiveness and social cohesion. The U.S. and China have the most obvious growing inequalities, but Canada’s record is weak, too.
Good governance is overwhelmed in important countries by corruption. Why do people worry about doing business in China, Russia, India, Brazil, Indonesia and, if early testimony in Quebec’s corruption inquiry is to be believed, in certain parts of Montreal’s economy? It’s because governance is so weak or so beholden to privileged elites that the rule of law doesn’t apply.
Governance is made harder when times are tough, when people feel their incomes threatened, their country’s future darker. But governance, as China might discover, can also be made harder when rulers feel the pressures from rising expectations.