De-Lurking on the Net

October 7, 2012

Dreaming a Governance Model for Europe and India

European Parliament

Markets finally made Mrs Merkel (Chancellor of Germany) to agree to second European integration step recently. The first step was the launch of Euro and now the new step of a month ago was the unlimited bond issues by ECB for the need of member countries. This is the akin to quantitative easing (QE) in a way though it is sterilised in spite of effectively expanding money supply by printing currency or doing repo auctions and buying bonds of member states. This bond buying may be soon be needed for further rescue of Spain, Italy and who knows even that of France one day. It is not sustainable in the long run, as there will be a need of higher contributions needed by some member states of European Stability Mechanism(ESM) as some will not be able to contribute anything to ESM bailout funds. So the next integration step will be inevitable within 2-5 years. At present, there are tax provisions for financial transactions, pollution (carbon tax, air travel tax) etc on individual states. But perhaps a direct taxation has to be on the table soon to cope with ever more growing need of finance. The taxation without representation or elections of authorities can not happen as member states would not agree to current model of positions to EU governing bodies by mere nomination or selection. For more integration through election, the Europe will need to evolve parties across member states. They also have to agree to a model of governance.

Interior of European Parliament

At present, the Europe has variety of models – the republic model of France ( team of President and PM), the Chancellorship of Germany and constitutional monarchy with prime-ministership of Belgium, Holland, Spain & Britain etc. So, the new important issue will be of selecting a governance model for Europe. The debate on this may take very long. But I assume it will settle something close to US model of President system rather than of the current models of governance in number of European countries. The parliamentary model based on British model lacks direct public participation and any subsequent interactions with the public. The local authorities governance may seem to assuage the feeling that local population have direct control over their affairs but it seldom does. Even the local representatives fight it out between themselves in councils rather than listening to the majority voice of the public after the elections. In days gone by, without electronics means the public participation in decision making was never there but now the public is armed with the new means of communication, so the politics has to be more engaging with the public. The online petition system to start a debate in British parliament may be alright for now but the need to consult on all kind of issues with the public will be important in future for any MP.

In countries like India, Pakistan, where the democracy is only skin deep. The parties do not have the democracy within themselves as there are no elections of party post holders and are considered to be owned by one family or a bunch of individuals. The systems in Australia, Irish etc. suffer from the ills of proportional representation system and not following the first past the post system in vogue in most countries while Brazilian presidential model brings a mix of both system in play in such a way that there is over-representation of smaller states which they exploit to the hilt. However, the US system has one big advantage over the 2 round election system (also called run-off system) of French. It enfranchises the public in direct voting of the country’s leader and therefore gives them more satisfaction. It also pushes the minor parties to aspire to become big parties by joining these major parties or perish. It does not incentivise the smaller one leader parties to prosper over a longer term. In a way, it is good for the integration of the very big geographical areas which Europe could indeed be and avoid the kind of coalition politics of paralysis India is engaging in for last 25 years. India’s current leader was anointed by the victor of last elections, so neither victor (proxy leader) feels responsible to the public nor the anointed one. The only problem I foresee in US system is the inclusion of electoral college voting system or the indirect election along with the direct election of president and vice-president by public. The decision of a election or arbitration by a court in tied results like the world witnessed in 2000 at the Bush V Al Gore election is never right as the election outcome will become dependent on the selected judge. Even the electoral college’s extra 5 votes for Bush also tilted that election in spite of the more overall votes for Al Gore across the whole country. So, this all could be avoided altogether if the overall % votes should be considered the first measure. If somehow that still leave a result tied then number of overall states won by any candidate should decide the result. The electoral college system should be eliminated completely to make the election fairer as it was the need of the hour some 200 or so years ago in both France and US but it can not serve today’s need of direct representation.

The system that should be adapted from France however is on regulation of spending and financing of campaigns by any political parties. The cap in France on spending is at approximately 20 million Euros. The government public financing of 50% of spending is done if the candidate scores more than 5%. If the candidate receives less than 5% of the vote, the government funds €800,000 to the party. The advertising on TV is forbidden but official time is given to candidates on public TV. An independent agency regulates election and party financing. Just like US, now France also has maximum 2 terms for president . The length of term however is 5 years which may not be that bad at present but perhaps it may prove really long and antique in 20 years time. Well, not only I am dreaming of a fast tracked presidential system in Europe but also for India to chuck away their parliamentary system for this so as to speed up their governance as there is a fear in the air that India will go into yet another election without letting public know who will lead the country. Suddenly an undesirable leader may reach to the top of the winning party and therefore may win the right to lead the country.  If public were to know about such a person before elections they may never vote such a party.   Well, I know some dreams always stay dreams but there is no harm in dreaming .

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