By Dani Rodrik 

By many measures, the world has never been more democratic. Virtually every government at least pays lip service to democracy and human rights. Though elections may not be free and fair, massive electoral manipulation is rare and the days when only males, whites, or the rich could vote are long gone. Freedom House’s global surveys show a steady increase from the 1970s in the share of countries that are “free” – a trend that the late Harvard political scientist Samuel Huntington dubbed the “third wave” of democratization.The dissemination of democratic norms from the advanced countries of the West to the rest of the world has been perhaps the most significant benefit of globalization. Yet not all is well with democracy. Today’s democratic governments perform poorly, and their future remains very much in doubt.

 

In the most-developed countries, dissatisfaction with governments stems from their inability to deliver effective economic policies for growth and inclusion. In the newer democracies of the developing world, failure to safeguard civil liberties and political freedom is an additional source of discontent.

 

A true democracy, one that combines majority rule with respect for minority rights, requires two sets of institutions. First, institutions of representation, such as political parties, parliaments and electoral systems are needed to elicit popular preferences and turn them into policies.

 

Second, democracy requires institutions of restraint, such as an independent judiciary and media, to uphold fundamental rights such as freedom of speech and to prevent governments from abusing their power. Representation without restraint – elections without the rule of law – is a recipe for the tyranny of the majority.

 

Democracy in this sense – what many call liberal democracy – flourished only after the emergence of the nation-state and the popular upheaval and mobilization produced by the Industrial Revolution. So it should be no surprise that the crisis of liberal democracy that many of its oldest practitioners are currently experiencing is a reflection of the stress under which the nation-state finds itself.

 

The attack on the nation-state comes from above and below. Economic globalization has blunted the instruments of national economic policy and weakened the traditional mechanisms of transfers and redistribution that strengthened social inclusion. Moreover, policymakers often hide behind (real or imagined) competitive pressures emanating from the global economy to justify their lack of responsiveness to popular demands, and cite the same pressures when implementing unpopular policies such as fiscal austerity.

 

One consequence has been the rise of extremist groups in Europe. At the same time, regional separatist movements such as those in Catalonia and Scotland challenge the legitimacy of nation-states as they are currently configured and seek their breakup. Whether they do too much or too little, many national governments face a crisis of representation.

 

In developing countries, it is more often the institutions of restraint that are failing. Governments that come to power through the ballot box often become corrupt and power-hungry. They replicate the practices of the elitist regimes they replaced, clamping down on the press and civil liberties and emasculating – or capturing – the judiciary. The result has been called “illiberal democracy” or “competitive authoritarianism.” Venezuela, Turkey, Egypt, and Thailand are some of the better-known recent examples.

 

When democracy fails to deliver economically or politically, perhaps it is to be expected that some people will look for authoritarian solutions. For many economists, delegating economic policy to technocratic bodies in order to insulate them from the “folly of the masses” is almost always the preferred approach.

 

With its independent central bank and fiscal rules, the European Union has already traveled far along this road. In India, businessmen look wistfully at China and wish their leaders could act just as boldly and decisively – that is, more autocratically – to address the country’s reform challenges. In Egypt and Thailand, military intervention is seen as a temporary necessity to put an end to the irresponsibility of elected leaders.

 

These autocratic responses are ultimately self-defeating, because they deepen the democratic malaise. In Europe, economic policy needs more democratic legitimacy, not less. This can be achieved either by significantly strengthening democratic deliberation and accountability at the EU level, or by increasing the autonomy of the member states to set economic policy.

 

In other words, Europe faces a choice between more political union and less economic union. As long as it delays the choice, democracy will suffer.

 

In developing countries, military intervention in national politics undermines long-term prospects for democracy, because it impedes the development of the necessary “culture,” including habits of moderation and compromise among competing civilian groups. As long as the military remains the ultimate political arbiter, these groups focus their strategies on the military rather than one another.

 

Effective institutions of restraint do not emerge overnight; and it might seem like those in power would never want to create them. But if there is some likelihood that I will be voted out of office and that the opposition will take over, such institutions will protect me from others’ abuses tomorrow as much as they protect others from my abuses today. So strong prospects for sustained political competition are a key prerequisite for illiberal democracies to turn into liberal ones over time.

 

Optimists believe that new technologies and modes of governance will resolve all problems and send democracies centered on the nation-state the way of the horse-drawn carriage. Pessimists fear that today’s liberal democracies will be no match for the external challenges mounted by illiberal states like China and Russia, which are guided only by hardnosed realpolitik. Either way, if democracy is to have a future, it will need to be rethought.