On Optimal Governance

A question that I have been thinking about recently is what degree of centralisation is optimal for governance. When speaking of optimal governance, the model that many bring up is Singapore. The essence of the ideal Singaporean technocratic model is a government run by skilled professional civil servants placed in power based on their merit rather than popularity or charisma. They are also highly paid to remove incentives for corruption. This way, they can govern in a prudent manner without needing to appease the base instincts of a generally ill informed electorate. However, at the same time there needs to be an accountability mechanism whereby the technocrats can receive feedback from the people and act on it to modify their policies. The end result, in Singapore at least, is a country with genuinely free elections but with one party in control since independence. Ostensibly, the people are satisfied with bargain of stable governance and prosperity in exchange for some liberties and so keep reelecting the same government. This is the recipe that many Asian countries have tried to replicate from Singapore to try mimic its phenomenal ascent from Third World to First.

All that is fairly reasonable, but the key provocative point is that not only is popular democracy not a prerequisite for prosperity, but that it can actively hinder it. According to the advocates of Asian technocracy, democracy and excessive freedom can lead to societal chaos with instability percolating to the top. This instability is supposedly why Asian technocracies gravitate towards an inevitable single party centralised state. When one sees how many democratic regimes in the postcolonial world have fallen, this appears less controversial. The dysfunction of the US, the model democracy of the world, following the COVID-19 pandemic, also reinforces this. Striving for the right balance of popular freedoms with centralisation of control to a technocratic government is what sets the stage for prosperity.

I have spent part of my life in Singapore, so I know what a fabulous place it is to live. At the same time, I cannot support this viewpoint without some serious qualifications. In my view the optimal balance of freedom and centralisation is highly dependent on the details of the individual country and its cultural norms. East Asia is traditionally conservative and deferential to authority, so systems that Westerners derisively call either “nanny-states” or “dictatorships”, can function well there. More generally, the path of centralisation brings the greatest risk-reward tradeoff. If a country is blessed with an enlightened technocratic elite always eager to learn, capable of making the right decisions more often than not, and able to humbly admit mistakes and change course, then it will enjoy rapid progress. This is what has characterised Singapore's leadership and, in past decades, China's. However, there is the equal risk that centralised power falls in the hands of the incompetent, where it can cause devastating consequences. China’s One Child Policy and the huge demographic problems it is set to cause is an example of how centralised decisions can have massive negative effects for society. Implemented in 1980 and very successful in setting the stage for economic development, it is now a key contributor to China's acute demographic crisis. Thus the type of “consultative authoritarianism” that Parag Khanna praises in his book The Future Is Asian is a risky proposition unless there is a very robust consultative mechanism. Indeed, the rapid centralisation of power under Xi Jinping, who has ended the CPC’s very successful self imposed rule of two 5-year terms, is a worrying sign of the natural tendency of authoritarian regimes to consolidate power and derail any mechanism which could act as a check.

A democratic system on the other hand is more boring. This sounds odd considering how the lifeblood of democracy is vociferous dissent, but it is that very dissent that makes it difficult to undertake monumental societal changes that an authoritarian system permits. This means that it is very likely for a democratic system to not implement a very important but politically unpopular change for many years. A good example is India liberalising its economy more than 40 years after independence after it had already fallen hugely behind China. However, it is also likely that a democratic system will not implement radical reforms that appear well intentioned but cause huge societal harm down the line. China's One Child Policy is the best example of such a radical reform. Democracy is therefore a course of moderation which lowers both risk and reward.

There are numerous complex factors at play here, including a society’s culture and its risk appetite as well as its economic imperatives. While I agree that democracy is far from the optimal system of governance, I don’t believe that a benign enlightened autocracy of technocrats is necessarily a guaranteed solution. In countries such as India, it would simply not be workable. Centralising authority in Delhi and removing the power of the states would encourage separatism and cause India to break along the readymade ethnic lines that its state borders provide. The closest experiment India has had to autocracy is when Indira Gandhi suspended civil liberties in 1975 and she herself had to restore democratic elections after only two years. It is also far more common in history for centralised power to be wielded by incompetent and/or malicious fools than by wise enlightened technocrats. Nevertheless, it is very difficult to make democracy work without education and a culture of at least basic civic engagement. An uneducated populace which doesn’t think critically will likely put itself on the path to ruin by electing fools or charismatic tyrants as leaders. The question of what system of governance to use is therefore a complicated one whose answer depends on the particular details of the country and people in question.

Overall, I am not convinced there is or ever will be a universal answer to what is the best system of government. It is a very nuanced question and probably has a different answer each time it is asked. Just as we laugh now when we recall the arrogance with which the West preached the inevitable universality of liberal democracy following the Cold War, future generations will laugh at those repeating the same mistake in the East. As is the case in many situations, a little humility is in order.