Will the current crisis enable better governance, or hinder it?

The forecast of good governance on this page, the first one ever of its kind (hence it should be seen as work in progress), has come out at the very beginnings of an unprecedented destabilizing crisis for this century. It is fair to ask oneself therefore how the prognoses here will be affected.

Many positive things exist in crises such as the current one. Among others, we can count more global solidarity, more understanding of inequities of globalization and structural inequalities, and more acknowledgment of insufficient progress in recent years in delivering equal treatment and opportunity. Ethical universalism is an unfinished business even in the most advanced democracies, and there is more awareness of that than before. However, violence and anarchy are on the rise mostly in free societies, which have done the most to enable ethical universalism, and where democratic avenues to solve grievances do exist. Partisanship has crossed any limits of acceptable behavior and has become really problematic sectarianism. The center is squeezed, and civilization and civility with it.

What our science tells us is that political instability does not breed good governance, however: it’s not merit which triumphs when violence is on the rise.

It is perhaps more likely that Mr. Trump will lose elections: however, the reform-minded President Macron may also go, too, as it showed in local elections this year, and the main profiteer is the right-wing party of Madame Le Pen. The Chinese whistleblowers of the Coronavirus have not been promoted to top party hierarchy in the ministry of health: instead, they are dead and China represses Hong Kong freedom fighters with little hindrance from the international community. This is not surprising, as on some days it seems that the countries where democracy has been born and evolved ever since, even if not to perfection- US and UK- are more problematic than Russia, China, Turkey and North Korea. In the latter countries, where there is no consultation at all, nobody storms public buildings and statues whose fate should be decided by all inhabitants of a city after debate, not just angry groups. The very essential feature enabling such behavior in democratic countries- freedom and the consequent lack of fear from repression- is taken for granted increasingly. In previous times when this happened, the rights of citizenry suffered, because the absence of violence of every kind is indispensable for liberal democracies to be able to ensure rights. Populists will have an easier time rallying people around law and order if equality promoters equally promote violence and unilateralism. The most productive approach to fighting corruption as a main curtailer of individual rights might suffer in such a context.

The first amendment to the forecast is that the more political violence grows, the less positive predictions come true and more countries come under threat of losing what they have acquired, the good governance fundamentals: freedom of thought, equality before the law and the capacity to mediate between different interests through debate and limited terms popularly elected office.

The second amendment refers to the important role of technology. While in recent years we have seen intense mobilization against social media because it enables the worst social groups’ instincts- groupthink, mobbing, selective exposure, scapegoating, trolling and harassment- our research group has continued to defend it as a force for good. Social media enable people to monitor their government, to rally and protest, and such collective action is indispensable for good governance. Research has shown, however, that social media algorithms promote aggressivity online because it sells more advertising, and groups such as the Yellow Vest are profiting from it. While we are very proud to live in an era on unprecedented technological development we see daily that this does little to deter people from endorsing identity politics, and the resulting collectivism and intergroup conflict. None of these help ethical universalism, a society where everybody is treated fairly and equally, with no difference due to particular characteristics of ethnicity, race, gender, sexual orientation, or any other difference. Technology helps only if it remains a force for enlightenment- hence our component of public integrity index, enlightened citizens, those endowed with Internet household connections and associated with others through social media. We still have a strong association between their numbers and the quality of governance. But will this correlation hold if trolls and mobs become stronger than ethical universalism promoters on the Internet? In our forecast we have seen progress over the last ten years on both sides- governments have become more digital, and citizens have become better at participating. This development has resulted in mostly incremental progress so far- indeed, there is no substantial case based on digital progress alone, not even Estonia, although the progress of cases like Brazil or North Macedonia is based in part on digitalization. While we are still believers in what technology can do for good governance and solving collective action problems, technology has to stay a force for civilization and dialogue if it is to fulfill its potential.

So far, threats for good governance overshadow opportunities from the current crisis. But this Is not over and the jury is out still.

The Good Governance of the Corona Crisis

The years since 1989, the previous threshold crossed by the contemporary world have seen unprecedented stress on good governance, with the adoption of international conventions and treaties, disclosures like Panama Papers and spectacular enforcement of the older American Foreign Corrupt Practice Act. But during this interval the world largely stagnated on the quality of governance. If anything, governance in top income countries declined slightly, and in less affluent countries stayed the same. Only a handful of countries registered significant progress- those good governance ‘achievers’ that I covered with an international team of researchers in several books and articles, and which are less than a dozen across continents.

It is very significant in these days’ debate to monitor the performance of these countries in the fight with the epidemic and to compare them with their income and regional counterparts, and why not, with older good governance achievers, like US, UK or Scandinavian countries. Of some, everybody heard in the past two weeks, even if not researching anticorruption: South Korea and Taiwan. These two democracies handled the Corona crisis brilliantly, acted swiftly on evidence to prevent the spread of the virus, learned from previous epidemics and summoned e-government, technology (apps to trace contacts) and the excellent relation between state and citizens, based on transparency and trust.

In Latin America, the good governance achievers have the lowest fatality rates. By Easter 2020, Chile with 1.1% and Costa Rica with 0.5% clearly stood out compared to Nicaragua’s 11.1%, Bolivia’s 8.2%, Mexico’s 6.6%, Honduras’ 6.3, the Dominican Republic 5.6%, Brazil’s  5.7% and Ecuador with 4.7%. Uruguay also did well. Africa was still at the very beginning, but already you could see that Tunisia, who is among the very recent countries which started on the good governance path (see map) has been handling the situation better than its neighbors.

It is more difficult to judge in Europe, the land of the oldest good governance achievers, but there it also seems that many countries which have improved their governance in the last thirty years- Estonia, Georgia, the Czech Republic, Portugal- handled the crisis better than ‘old achievers’- countries like France or UK.

This highlights a previously neglected issue- that the equilibrium representing good governance, the state-society balance that we capture in the Index for Public Integrity, needs to be sustained over time and should not be taken for granted. Indeed, the John Hopkins University-EUI who  estimated UK and US far better prepared than Germany or South Korea should revisit their criteria and allow a larger role for political leadership. Also, would it not be nice to include Taiwan in the 195 countries GHS index, as clearly its governance was superior to many and so some lessons could be learned from there? Poor leadership (as well as a good one) matters. It can enable or deter collective action needed in such times, and both these old good governance achievers showed that, leading to loss of lives. From the “old achievers”, Germany confirmed the most, with a low fatality rate (compared to the other West European countries) owing a lot to the same non-populist, solid social contract, where the state acts on evidence and broad consultation, the citizens trust it to do so and the public and private sector, as well as different branches of government cooperate well. Still, Germany did not react as swiftly as either Korea or Taiwan, who had more cases after China originally, but managed to curtail the spread from very early on. Or Iceland, the marginal European island which made a prime minister resign in half a day after it turned out his family’s money was invested offshore and tested all skiers returning in one flight from Ischgl, an Austrian virus hotspot.

The more a government is able to draw on trust and technology, the swifter and more effective the response. Taiwan merged its national health insurance data with customs and immigration databases to create real-time alerts to help identify vulnerable populations. Iceland made an app which created a log of where the user had been to enable contact-tracing – sharing it with authorities being done on a voluntary basis, unlike Korea where quarantined people have to use it. Countries which used e-government tools to lower red tape and electronic means of payment to increase tax collection and diminish the unaccountable money volume- like Estonia or Uruguay- found it easier to handle the crisis. They had been already reducing personal contacts and paperwork between government and its citizens.

Acting rapidly on the evidence to prevent corruption, with the help of both responsible and critical citizens is also the essence of successful anticorruption: what you do after the outbreak already matters less, because it cannot be so effective even in the best of circumstances, that few countries enjoy anyway (like great impartial prosecutors and effective courts). The countries which had managed to build control of corruption successfully in recent times were thus far more prepared for this crisis even than those advanced countries which had received it as a heritage from their ancestors. Good governance needs current practice, but also returns dividends, as we could see during this pandemic.

France

France, the country which has historically pioneered merit based civil service and has some of the finest public accountability laws in the European Union has been constantly shaken by political corruption scandals over the past thirty years. Its judiciary is not sufficiently autonomous from government, resulting in weak prosecution of corruption, particularly at top levels. Restrictive laws and conservative minded magistrates further restrict the media’s capacity to disclose corruption rather than only reporting after official investigations begin. Transparency could be improved, and far better oversight is needed to monitor the compliance with international legislation of companies seeking government favors abroad. Recent attempts to tighten conflict of interest rules and enforce them at top political level have yet to be internalized into changes of practice.

EU Aid and the Quality of Governance

Using a panel dataset on 103 developing countries, this paper empirically analyzes the impact of the European aid flows on quality of governance in aid recipient countries. The analysis employs aggregated Official Development Data as well as disaggregated project level data. The results show that while bilateral aid from the largest European donors does not show any impact, multilateral financial assistance from the EU Institutions leads to an improvement in governance indicators. These findings thus suggest that European development assistance can help to promote good governance if aid is allocated at the EU supranational level rather than at the national level of the member states.

EU Aid and the Quality of Governance

Using a panel dataset on 103 developing countries, this paper empirically analyzes the impact of the European aid flows on quality of governance in aid recipient countries. The analysis employs aggregated Official Development Data as well as disaggregated project level data. The results show that while bilateral aid from the largest European donors does not show any impact, multilateral financial assistance from the EU Institutions leads to an improvement in governance indicators. These findings thus suggest that European development assistance can help to promote good governance if aid is allocated at the EU supranational level rather than at the national level of the member states.