Many new democracies have emerged since the late 1980s following
worldwide demands for respect of human rights, accountability and
transparency in policy making. Aid donors have promoted the view that
democratization improves the quality of public policies and services.
However, democratization is occurring at a time when the power of
investors and financial institutions is changing both parameters and
styles of governance. Financial globalization, high levels of
indebtedness and neoliberal prescriptions narrow economic policy options
to a limited set of objectives that emphasize fiscal restraint,
privatization and liberalization.
In order to meet these objectives, policy making is increasingly
restricted to \"technocrats\", or those with highly technical knowledge
and expertise whose decisions are unconstrained by political processes.
Technocrats tend to work in those executive institutions of government
that are the most insulated from public pressure, and therefore the
least democratically accountable - such as central banks, and finance
and trade ministries.
Technocratic styles of policy making pose problems for democracies. They
distort structures of accountability, as governments become more
answerable to multilateral agencies and investors than to representative
institutions and the public at large. Such styles of policy making also
affect responses to employment and social protection, poverty
eradication and conflict management. Even though these issues are
important in consolidating new democracies, they may be sidelined by
policy objectives that emphasize macroeconomic stability. Furthermore,
citizens may lose confidence in the democratic process if they believe
their votes are irrelevant in decisions that affect their lives.
Yet if governments are to be responsive to citizens' demands, policies
- including economic policies - must be decided democratically. The role
of legislative institutions in holding the executive accountable is
crucial in this regard. In democracies, legislative institutions -
parliament or congress - are expected to aggregate and articulate
citizens' choices, scrutinize policy proposals and provide legitimacy
for policy outcomes. But economic policies affect social groups and
institutions differently, and democratic processes and accountability
suffer when important decisions about trade-offs are entrusted
exclusively to technocrats. Central bank chiefs and ministers of finance
and trade, for example, may be beholden to special interest groups in
the financial world, which may privilege strategies for inflation
reduction, or financial and trade liberalization, over those for
employment generation or more inclusive social protection.
Briefing available in english, french and spanish.
United Nations Research Institute for Social Development, Geneva, Switzerland, ISSN 1811-0142, 4 pp.