 On
the heels of federal elections in both Canada and the United
States, and potentially the greatest economic downturn since the
1930s, one cannot help wonder if there are some other underlying
conditions or situations contributing to the problems – record
low voter turnouts, lack of trust in elected officials, poor
policy decisions, and lack of vision and bold action on behalf
of leaders.
This brief offers a short and pointed prescription on an
underlying structural problem which is directly and indirectly
contributing to the above issues: A Broken Incentive
Structure.
There are those who argue that government is best left to the
sidelines when it comes to decisions related to the economy,
business regulation, corporate assistance, and that the markets
are infinite in their wisdom. Others believe that the government
should and must play a larger role in society. While I will not
be taking a specific position on this other than is in line with
the prescription within this paper, the distinction needs to be
made between the left and right of government vs. business vs.
ideology. They are all different and one need not espouse to the
same perspective on all things at all times. This is not an
ideological debate, but rather how optimal incentives can be
created to achieve the purpose and mandate of elected officials
and policy makers.
The underlying premise of this paper is that there is no longer
a functioning incentive structure within elected office or
public administration that works to the benefit of the
democratic system of government and the people. What we do have,
is many structures and mechanisms that have created
disincentives for these people: to not make mistakes that are
too large, to not take bold actions which are clearly in the
best interests of the country and the people, to not do
anything which endangers the officials elected position.
Mandatory voting
There are two foundational principles that any definition of
democracy includes. The first principle is that all members of
the society have equal access to power and the second that all
members enjoy universally recognized freedoms and liberties.
These principals go hand in hand with the responsibility of
being informed and knowledgeable enough to exercise this
right—an educated populace is an essential prerequisite of
democracy. In order to have a stable and functioning democracy,
the electorate must be able to differentiate between right and
wrong, between truth and lies, and it must be able to see
through political lines. As importantly, the electorate needs to
understand the political system.
Democracies must empower the people to not only have a say in
the running of their nation, but to actually hold the
power under a free electoral system. For the system to work
effectively and optimally, therefore, it is incumbent on all
citizens to vote. Lack of voter turnout due to apathy and lack
of interest render the system – and its results – suboptimal.
This is made worse by the many first-past-the-post systems
currently employed by Canada both nationally and provincially.
If one believes that democracy and right to vote is indeed a
right, then with that right comes responsibility. It is indeed
the right of a person to cast a ballot. It must also become the
responsibility of each and every citizen to vote. Hence, there
are two options to ensure maximum—if not 100%—voter turnout. The
first is to create an incentive for voting, like a nominal but
measurable one-time tax deduction of $500. This however, would
have a negative fiscal effect on government treasuries. A better
model is for the implementation of a fine for not voting, or
some form of disenfranchisement whereby state-provided goods and
services are denied for not voting. This better aligns the
incentives of the government and the people, without hurting
either party if all goes according to plan. The level of
the fine should be, again, impactful but not debilitating, like
a hefty speeding ticket. The goal is of course behaviour change.
In order to implement this, there must be changes to the
respective Election Acts in both Canada and the USA, in our
example cases. There are currently 32 countries with compulsory
voting, and 10 within the 30-member OECD itself. The nations on
this list include Australia, Belgium, Singapore and Switzerland,
to name a few.
Fixed term length without re-election
In order for public policy and government action to truly be
bold and in the best interests of the populous, we must remove
all other incentives from the picture. Democracy was not created
to be either a bastion for or a stomping ground of, ideologues
or people of limited—or no—success in other careers. The one and
only purpose of elected office is to represent and speak on
behalf of constituents. In its true sense, it is not a forum
intended to represent no one’s own views or ideologies. Somehow,
over the past few decades, elected office has become exactly
what it was to protect against: a few deciding for the many, a
few dictating to the many, and a few doing whatever it takes to
cling to the privileges and responsibility given to them
by the many.
By removing the concept and option for re-election, the motives
to run for elected office or public administration will become
more pure and will allow for the person, platform, and vision to
be front and center. Only people with a true desire to make
change and positive impact for the greater good will run for
elected positions. They will only receive one shot; they will
only have a limited time to make as much (positive) change as
possible.
One issue with this one term arrangement is it may deprive the
country of an exceptional leader to lead undertakings of more
than one term. An exceptional leader who enjoys the support of
the people and is judged by the electorate as positive
force for the country can continue to make an impact and exert
his/her energies towards the betterment of the nation. Elected
office is not the only place to achieve this. Moreover, I would
argue that a key ingredient to optimal public policy and
continual improvement is the elimination of the view that
political life is a career or profession. It should be a
temporary vehicle for helping a nation make progress whereby an
individual is trusted and elected by the people.
Another issue is that it may bring about huge swings in policy
upon change of government. This is mitigated by enhancing
existing structures or creating new structures, to ensure
continuity and also limit the position/role of executive powers.
In effect, what I’m prescribing is a more clear separation of
the ongoing functions of a central government (through elected
officials and policy makers) versus the actions/policies
implemented by a newly formed government. Continuity is also
protected by the fact that only a portion of the elected
officials are newly elected at any one time.
Of course, it is difficult to envision (current) elected
officials as being proponents of this recommendation.
Unfortunately, this is expected given some above criticisms of
these people. Such a demand and dramatic change must come from
the voters, giving rise to a new class of candidates vying for
elected office—a new class of politician if you will. One way to
encourage a change in current thinking would be for the creation
of a series of transitory stages within the political life of an
elected official. In such a way, a person can smoothly
transition from his/her elected post to another place within the
government, whereby their knowledge and experience can be put to
further use, while allowing for continual refreshment of the
elected houses. Of course, the positions taken up by these
formerly elected officials cannot be permanent, as the system
requires a relatively frequent (4-6 years) at all levels. It
does, however, pave the way for a smoother transition out of
elected office, into other careers either within government or
industry.
Compensation level and structure
We often hear complaints that the decisions and actions taken by
elected officials are below expectations, or even disappointing
to the population at large. Elected officials and policy makers
consult with leaders within business and industry and academics
before making certain decisions. What would it look like if the
people in elected office and public administration were the
experts? What if they were the best and brightest a society has
to offer?
We find that the greatest minds graduating from universities,
colleges or specialty programs go into industry rather than be
involved in government and public policy. Why is this? Part of
it is no doubt because of interest and aptitude. But does
compensation, or lack of it, contribute in any way? Would the
valedictorian from a MBA program run for elected office to help
make positive, impactful, and lasting change if the opportunity
cost is 50% or more in compensation? Would the top doctor
currently operating a hospital run for elected office if the
opportunity cost is hundreds of thousands of dollars in annual
compensation? The answer to both, sadly, is no. Now, I’m not
proposing that raising compensation is the answer to all the
issues. What I am proposing is that to attract the best and
brightest from all walks of life (academia, industry, etc.), we
must have a system that reduces or eliminates the incentive
difference as much as possible.
There are functioning models around the world where some of the
most respected elected leaders draw zero compensation.
While this ties in well with the fixed term model above, it has
some flaws which make it less optimal than raising compensation
to the highest levels available as compared to other
opportunities. First, a model with zero compensation is
prohibitive for all but already-successful business leaders or
independently wealthy individuals. Second, it is less optimal
when considering the necessary alignment of incentives – zero
compensation turns elected office into a volunteer position,
which can create unwanted trade-offs and competition for the
person’s time/resources. Hence, I propose a compensation
structure which puts the salaries of elected officials amongst
the highest available to any persons within society. This will
put it on a more level playing field for the attracting the most
worthy—the best and brightest within society.
This is the model being employed in Singapore, where ministerial
salaries are based on a benchmark derived from private sector
pay. While the concept of corporatist pay may not be unsettling,
it should be combined with corporate-style key performance
indicators such as GDP growth, reduction in poverty levels,
reduction in gap between rich and poor, and other indicators of
a society’s well-being.
Individual member voting
The final item on this prescription list deals with one of the
most fundamentally flawed mechanisms within many democracies. If
the elected representatives are elected by the people and are
for the people, then where does block voting fit in? Again, a
systemic shift has occurred over the past few decades, which has
led to voters voting for a party rather than an elected
official. Perhaps this is a natural by-product of a
parliamentary democracy. If so, then it should be altered to
better suit current wants and requirements.
What good is it to have a general election—regardless of
turnout—when that turns into 3-4 block votes? Is this in line
with democratic principals? I would argue that it is not.
Consider the following: democracy works only because the people
are collectively better equipped and more qualified to select
their leaders, than any selected subset of that population. If
this were not the case, why wouldn’t we allow the myriad of
political pundits and analysts to choose for us, who will
represent us? By the same token, members of any house of
representative must be allowed to vote as individuals, so that
their collective knowledge and wisdom are brought into play, and
the needs and wishes of constituencies are fulfilled.
In effect, the responsibility and onus proposed on the
electorate (above) must also be placed on elected officials, so
that the elected houses themselves become shining examples of
democracy in action. That is the only way to return a sense of
empowerment to constituents, and to hopefully end voter apathy.
An improvement on the status quo
The above prescription is an undisputed – and mathematically
provable – improvement on the status quo, for a number of
reasons. First: the collective knowledge, sentiment, and
judgment of the constituents (which also contains all the
abilities of the representative official of persons vying for
the position) will be by definition more inclusive and superior
to that of any subset from within the same population. This is
not only intuitively correct, but also demonstrated though 5+
decades of empirical data. What has been missing until now is a
robust mechanism to extract and execute on this. So, given the
above prescription and all the underlying principals that make
it work, the population cannot be wrong, or at a very minimum,
it cannot be more wrong than the judgment of any
sub-population from within it. Second: in the event of a
conflict between the will/decision of the population (through
their elected representatives) and the law, the conflict will
automatically be muted because of the prerequisite of being
informed and educated about the issues, and mandatory voting on
these issues and decisions. Hence, illegal or unconstitutional
acts cannot take place as the awareness any such conflicts will
be a part of the decision. If the population wishes to alter or
consciously go against their own laws, then so be it, and the
appropriate actions to make it so would then take place. Third:
there are already a number of mechanisms in place within
virtually all democracies which offer remedies and provisions
for the electorate to remove or replace, either directly through
elections or indirectly through confidence votes and
referendums. The above prescription actually decreases the lag
between any possible straying of policy from that mandated by
the population, as the involvement of and interaction with the
population is far greater than any system commonly being
employed. Fourth: because the prescription removes the
possibility of re-election, all policies and initiatives which
go beyond a single term will becomes mandated under the auspices
of the government (which supercedes any party within it, and is
composed of all parties within it) itself, and appropriate
departments and institutions that are staffed by largely
non-elected officials. The phenomenon of elected officials
acting out of a need to leave a legacy will, as stated above by
multiple mechanisms, only be possible when in complete agreement
with the will of the population, as all mandates will originate
from them.
The above prescription is a significant departure from the modus
operandi of most democracies, at least the manner in which they
currently function. This is intentional and by design. The
premise of this paper is that the way in which most – if not all
– democracies and policy making function today are broken, and
moving in a direction which is contrary to the founding
principals of this form of government and public policy-making.
While the change may be unwelcome and vigorously fought by the
people currently within these elected positions and
policy-making roles, the appeal must be made to the population,
and why they must demand such changes and improvements to ensure
the problems that have crippled and hindered the advancement of
nations in so many areas come to an end. |
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