Francis Fukuyama asks, What is Governance?

by Mike Gibson

He even has the courage to doubt that democracy is always the best:

We Americans tend to believe that democracy is an intrinsic part of good governance and that more democracy means better quality government…However, this postulated relationship remains just a theory that remains subject to more empirical testing. One can think of many ways in which greater democratic participation actually weakens the quality of governance. One case happened in the United States when Andrew Jackson was elected president in 1828, as a result of the broadening of the franchise in many states in that period. Jackson argued (1) that since his party won the election, he should get to appoint federal officials; and (2) that there was no job in the US government that was so difficult that any ordinary American couldn’t do it. This was the beginning of the patronage system in the US, in which the federal bureaucracy was controlled by the two political parties and in which jobs turned over with every election cycle.

Of all the problems democracy generates, this piece of history is small beer, but it’s a start for thinking through some of the obstacles to good governance.  It is true: relying on patronage systems instead of performance based metrics worsens rent seeking. Nevertheless, Fukyama is trapped in the academic political philosophy fly bottle–namely, his attention is drawn to the question of who should rule. He concludes we should trust the council of the Ivy League Jedi:

I would argue that the quality of governance in the US tends to be low precisely because of a continuing tradition of Jacksonian populism. Americans with their democratic roots generally do not trust elite bureaucrats to the extent that the French, Germans, British, or Japanese have in years past.

It’s baffling that he’d point to European countries that are one step from cascading into Michael Bay explosions detonated by a flurry of defaults.  And elderly Japan’s back may soon break under a debt to GDP ratio greater than 220 percent.  Any old how, the better question he should ask is: what system of governance discovers error quickly and roots it out effectively? The answer begins with the exit/voice paradigm, which implies a trial and error discovery process. Fukuyama is too focused on top down, hierarchical feedback loops. These are important–look at corporate governance–but alone, they are not optimal. Call them citizens, call them customers, they also can join the effort from the bottom up either by voting the bums out, yes, or by simply leaving for something better by their lights. Good governance is not an absolute institution independent of the wider ecosystem of competing governance structures. This is like asking “what is good corporate governance” independently of asking whether there’s a competitive market.