Friday, March 26, 2010
Greece and capacities to govern
What does the current Greek crisis say about the capacity of national and international policy-making processes. The impression we all have is that government systems are fast losing whatever capacity they had to deal with problems. Or is this just a British perception? The British system is easier to track than other countries – partly because it’s a relatively transparent system (so many journalists; think-tankers and academics covering policy issues and with an interest in revealing policy disasters) and partly because the language used is a universal one (it’s more difficult to track the French system in any detail).
I remember the shock I had when the costs of the UK poll-tax fiasco were first revealed in the late 1980s – it was, I think, the first time the public heard the word “billions” of pounds used in a policy discussion (now we yawn at the term!).
And then there was the perversity of rail nationalisation in the UK where public subsidies of about 1 billion pounds a year were replaced by a so-called “privatised” system which, within a deacade,became user-hostile and required about 3 million a year of public financial support. For some background see here. And also the Private Finance Initiative (PFI) system which the recent excerpt from Craig Murray’s blog referred to – which multiplies the cost to the public of schools and hospitals by a factor of about 5 and gives us fairly shoddy products (see NAO reports).
And those outsiders who are supposed (according to the theory of liberal democracy) to control government decision-making (parliamentarians and journalists) are ineffective. The Scottish Executive and Parliament which were set up in 1999 (after a gap of almost 300 years) tried to go in a different direction – but adversarial political and administrative cultures die hard. And – despite such efforts as Charter 88 and the more recent Open Democracy initiatives - the English system seems impossible to change. Or, rather, “plus ca change, plus c’est la meme chose”!
But what about the rest of Europe? Scandinavian, French and German systems seem to produce better (and less disputed) public services. The German and Scandinavian political systems have strong elements of consensuality built into them. New policies have to be argued through – and indeed negotiated. The British system is adversarial – and autocratic. The French civil service has retained its powers to challenge the political class – the British one made more subservient to the political class.
It is the conventional wisdom that this balance and negotiation (with and between political and administrative systems) plus decentralisation which produces policies which work.
What has all this to do with the crisis in which Greece and the eurozone now finds itself in? It was all so predictable – Greece was not ready for EU membership (let alone access to the eurozone). And the euro rules out the option of devaluation for weaker economies – who are therefore doomed them to the role of peripheral regions in a national economy. Once this is recognised, the EU needs to develop and apply stronger policy tools.
For a more technical appraisal of the Greek situation see Becker’s contribution in the excellent blog wriiten as a dialogue by 2 eminent americans - /