The Rules We Live By: Democracy’s Slow Fix
26 May 2011
By Frank Vibert for openDemocracy
For example, when you are asked for proof of identity in order to open a bank account, the bank is following a “know your client” rule of the Financial Action Task Force (FATF) located with the Organisation for Economic Cooperation and Development (OECD). If you are in the position of looking at a private-pension supplement to a state pension, you might want to know that your options are heavily influenced by the work of the International Accounting Standards Board (IASB), one of a number of bodies clustered around the Bank for International Settlements (BIS).
Such global rules of behavior have long been seen as a good thing - an attitude that draws on the lessons of governments’ “beggar thy neighbor” policies in the 1930s which contributed to the rise of fascism. They can help solve problems that cross national boundaries, such as health pandemics. They also may contribute to a more peaceful world: potentially helping to constrain the behavior of large powers, and moderating the behavior of governments driven purely by self-interest.
A democratic deficit
Indeed, more international rules of behavior are likely to be needed in future. The days when one or two powers could set their own rules are drawing to a close, while the problems that call for international solutions grow. However, two major difficulties stand in the way: a democratic deficit and persistent failures of judgment.
The first problem is that international rules are currently made in undemocratic ways. Citizens are often unaware that a rule stems from an international agreement, have no knowledge of where it has been made, and have little or no chance to influence its passage or to protest against it if they don’t like it. The world of international organizations is a jungle of acronyms; and the labels attached to international agreements, which range from “treaties” via “protocols” to “memoranda of understanding”, provide no guidance to the sweep of the content or to how binding they are intended to be.
Moreover, agreements often change their character as they are transmitted. What may start out as a flexible agreement on principles with many “escape clauses” may end up channelled through “guidelines” that mandate enforcement through the law. This lack of democracy undermines rule-making in very practical ways. The consequence is to expose the rules to vigorous opposition: from authoritarian regimes that are likely to flout any rule that is inconvenient, and from public opinion and influential groups in democratic countries.
An expert-group failure
The second problem is that the rule-makers are prone to fail in their judgments about the content of the rules. Such failure was highly visible in the case of the international financial crisis since 2007-08, which occurred regardless of a dense international network of rules and institutions. But it is not just in finance that allegations of failure can be made. The World Health Organization (WHO) has been criticized for the way it handled the avian-flu and swine-flu epidemics; the International Panel on Climate Change (IPCC) is scorned for using unsafe procedures in assessing the evidence for the human contribution to global warming.
The basic reason for failures in rule-making flows from the weaknesses of expert groups. Experts in one form or another - from economists to animal-health experts to agronomists - dominate the world of international rule-making. They rely on a combination of knowledge gained from the formal disciplines of the natural and social sciences and knowledge gained from practical experience - for example as central bankers or epidemiologists.
The problem is that, despite this knowledge, they often get things wrong. Moreover, when they do get it wrong there is little likelihood that governments will correct their errors. Government officials and politicians don’t have the knowledge to second-guess the experts.
Why do these expert groups get it wrong? Much of their inadequacy can be attributed to what is known as “cognitive bias”. The very same characteristics that give expert groups their strengths (such as their shared views of what counts as evidence and what contributes to causation) also leave them extremely vulnerable to various forms of bias. In the international financial crisis one such form of cognitive weakness, herd behavior, was particularly evident; but there were others as well.
The response to failure
These two problems - the democratic deficit and the weaknesses of expert groups - will not be easy to overcome. But there are ways in which they could be addressed. In relation to the democratic deficit, for example, every venue and every agreement, in whatever form it takes, should be accompanied by the possibility of judicial review. There could also be a great strengthening of mechanisms for parliamentary review. Where issues of major constitutional importance are concerned, referendums may also have a place.
Where the shortcomings of expert groups are concerned, procedural defenses against the cognitive biases of such groups need to be erected. These should be designed to ensure that the evaluation of a situation is carried out by more than one team of investigators; that key facts or inferences that swing the analysis one way rather than another are clearly identified; and that the tendency of governments to ignore the views of those who may disagree with the proposed rules should be countered.
Such reforms have some way to go, for at present no single international institution or expert group uses the necessary set of procedures. This means that rule-makers can be expected to continue to get it wrong - not all the time, but enough that it counts. Their mistakes are both extremely costly in themselves and undermine belief in the usefulness of international rules of behavior.
The reforms may also face obstacles from expert groups that resent their work becoming more visible (and slower), and from governments that may not welcome providing avenues for dissent. But if international rule-making is to become less prone to failure and more strongly founded on consent, some form of external discipline on both experts and governments is needed.
A procedural focus
The proposal to formalize international rules of procedure that impose an external discipline on experts and governments may not set pulses racing with excitement. It is much more eye-catching to talk in terms of the need for a world parliament, or for some form of world government, or a grand design for cosmopolitan democracy. It is also much easier to look for quick institutional fixes - for example, to pin hopes on bodies such as the G20.
But quick fixes offer the illusion rather than the reality of a solution, while grand schemas such as global democracy remain a a distant dream as long as there is a lack of agreement on the principles of power-sharing. In the meantime, the apparently dry emphasis on procedural disciplines - what experts and governments can and cannot do - should be seen as a first step towards a more ambitious long-term goal: constitutionalizing the international order.