Opinions - 09.03.2012 - 00:00 

Global economy, local democracy

When decisions are increasingly made at a global level, there is a danger that democratic structures become less important. Political scientist Daniele Caramani on democracy in times of globalisation.


8 March 2012. The EU fiscal treaty is expected to be put to a referendum in Ireland. Once again, the fate of Europe’s finances, including their impact on the world economy as a whole, is in the hands of just under three million voters. Should a small, local democracy be in a position to put a question mark over decisions of such momentousness? Many politicians’ reaction is one of annoyance. Yet is this a reason for the Irish to waive their democratic say? To the contrary: from the angle of democracy, the Irish referendum does not appear to be sufficient. The problem is not too much political participation, but too little.

National elections with local character

Let us imagine for a moment that in Switzerland, elections only took place at municipal level. No national parliament, no referenda at federal level: could this be described as a functioning democratic system that enables citizens to be actively and effectively involved in the constitution of their living conditions? Obviously not: the hypothetical example strikes us as absurd. And yet exactly the same is currently happening at the global level. In a globalised world, national elections and referenda are increasingly becoming local in character. Which means that we are able to have a say in the planning process for a tram line, but when it comes to rescuing entire national economies, we are condemned to be silent onlookers.

Today, the greatest danger for democracy lies in the fact that democratic institutions are limited by the narrow borders of nation states whereas trade and climate policies, the fight against crime and problems such as demographic change have long crossed these borders. International decisions in such areas have passed beyond democratic control. Does this mean that the borders of nation states are identical with the limits to democracy?

Too slow a pace for the global economy

So far, democracy has been unable to keep pace with globalisation. International organisations recruit their personnel from among experts and government representatives. Frequently, countries with authoritarian regimes are accepted as members of equal legal standing. Meanwhile, the proportion of private capital is increasing on the international financial markets, and globally operating business corporations are often more powerful than entire countries, whose fate hinges on internationally operating investors. And more and more people who leave their native countries to look for work elsewhere lose their democratic say at home but in their host countries are not part of the electorate either.

Against this background, it does not come as a surprise that people are increasingly frustrated. The sense of powerlessness is reflected in decreasing election turnouts alone. The same discontent also manifests itself where attempts are made to curb globalisation by means of protectionist measures, no matter whether this is at an economic and legal level or at the level of culture. The situation is paradoxical: to preserve democratic influence, democracies avail themselves of undemocratic methods. Thus many observers are toying with the idea of the more or less “soft” regimes of countries like China or Singapore, which have optimised their economic efficiency with the help of state-capitalist systems.

Democracy degenerating into a “luxury item”

What it mostly boils down to, it is often argued, is that prosperity and security are guaranteed, while democracy is really only something like a secondary need, a luxury item! In Europe, people have already been heard to say that the Greek parliamentary elections should be postponed since they would only interfere with the ongoing process. The legitimacy of a political system now merely seems to depend on what results it produces but not on how decisions are made within it.

Such arguments, however, fail to do justice to the matter. Democracy is not a luxury item; it is a necessity since the economy and social progress do not only live on freedom but also on responsibility. Without the broad social cohesion that can only be safeguarded by means of democratic processes, economic life would be unable to function. A globalised world in which decisions are arrived at without the participation of the people they affect would not only be a less democratic world but also a world in which the economy would be less dynamic and less innovative.

Picture: European parliament building in Strasbourg. Photocase / Nonuniform

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