Raghuram Rajan is apparently not a fan of electoral democracy, believing it to unduly weight political officials decision-making toward special interests and the short-term. Like Noah Smith I’m struck by the point that this fantasy of autocratic politics as unhampered by special interests is ridiculous:
Rajan seems to believe the common fallacy that autocratic governments answer to no one, and thus have a free hand to make far-sighted investments, as long as the despot happens to be an enlightened one. In fact, autocratic governments also have to answer to someone — but instead of the people, it’s usually a mix of army officers, party cadres, local officials, and mafia goons. There is always a selectorate, and they always have to get paid off. And in an autocracy, those payments can get really expensive, since the selectorate has the autocrat over a barrel — if he loses his job, he doesn’t go off to fish at his ranch, he gets filled with lead and hung from a gas station roof.
Exactly. Part of the genius of electoral democracy is precisely that it lowers the stakes of holding on to power. A member of the House of Representatives who wants to take risks for the sake of doing what he regards as the right thing faces the dire prospect of . . . needing to find another job. Very possibly a job that will pay more money and involve less annoying travel. Laurent Gbagbo, on the other hand, is facing a very bleak fate.
To me the interesting thing about democracies is that they’re much worse at preventing/avoiding/ending recessions than you might think. When Herbert Hoover was president, where was the short-term thinking to keep him in office? Why didn’t the ruling GOP do more in 1960 to ensure that Dwight Eisenhower would be succeeded by Richard Nixon? Why didn’t the 111th Congress enact a much larger fiscal stimulus package and demand looser money from the Fed?
Conversely, while your mileage may vary as to the quality of the policies enacted, it’s hard to deny that over the past two years America has seen lots of focus by politicians on long-term issues. Love the Affordable Care Act or hate the Affordable Care Act, it was clearly an effort to implement long-term change in the American health care system and not a quicky re-election gambit. Similarly, Scott Walker in Wisconsin and other conservatives governors elsewhere are attempting to reduce the structural power of labor unions. In both cases, these are long-cherished goals of party leaders that are being foisted onto the agenda when a more narrow electoral focus would militate in favor of letting sleeping dogs lie.