The Crisis of Governance and The "Death" of Democracy?
Growing interest and Concern About Governance
Governance is provoking a lot of discussions among lawmakers, rulers, the judiciary, academics, the media and on blogs.
This growing interest for governance issues seems to come from the crisis that is affecting administrations and regimes in many countries including the most advanced democracies.
For example, the whole world is witnessing with amazement, the unprecedented governance crisis happening in the United States of America where the current president Donald Trump is accused of obstruction of justice and collusion with the Russian government to destabilize the U.S democracy. An investigation has been ordered by the congress and carried out by the special counsel, Robert Mueller. After two years of investigation and 35 million USD spent, the report was released partially by the Attorney General William Barr and created a scandal which has opened a Pandora’s Box with law makers accusing William Barr of protecting the president. And the law makers are also accusing the president of undermining the foundations of democracy and calling for his impeachment.
Another case is the presidency scandal in South Korea, where the president Park Guen-Hye has been accused of corruption. formally charged with abuse of power, bribery, coercion and leaking government secrets and sentenced to 25 years in prison.
Recently in Thailand, the president of the TAT (Tourism Authority of Thailand) has been indicted of corruption and sentenced for 50 years.
Good governance is also affecting corporations, as shown by the recent Nissan case, where very famous president Carlos Ghosn has been spectacularly dismissed from the board, arrested and jailed in Japan.
In France, one of the most powerful and almost untouchable business tycoon, Vincent Bolloré, has been accused and formally indicted of corruption of African Political Leaders for the benefit of his own business.
Even respected organizations like the United Nations are not immune from governance mishaps. The UN is accused of being a “bastion of corruption and scandals.”
Crisis of Governance Leadership, Conflict of Interest
Beside the governance crisis, political leaders themselves, seem to make things worse by their inappropriate behaviors, blunders, mistakes. We give a few examples below.
Top blunders and Inappropriate behavior of World leaders
Denial of Climate Change by Donald Trump.
The Inconvenient Truth from President Chirac calling for Justice for Africa
For a majority of French people, such “honest confession” of wrong doing against African nations, by the President of a former colonial power and post-colonial influence was a big blunder that could create awareness and revolt.
Collection of blunder from world leaders
It is unusual, but quite surprising and interesting to see so many world leader behaving inappropriately and making mistakes that would put any ordinary person to shame.
Lies of President Trump
Lies has never been considered ethical, moral, and justified. In some situations, Lying is even considered as a crime. The 45th president, Donald Trump, is characterized as a compulsive liar, credited by the newspapers with more than 10,000 documented lies since he was elected.
Conflicts of Interest and Risks of Corruption and Nepotism
Conflict of interest is a situation in which an individual or an organization may be involved in multiple interests mostly of monetary, financial or business nature while in a position of decision-making that can benefit them and their relatives (nepotism) or a third party.
One of the concerns of democracy is to avoid giving the opportunity to an elected leader to take advantage of their office to become richer as the expenses of the nation.
The debate about whether the US President must disclose his tax returns for the public to assess his wealth before and after being elected, is very important.
Ironically, despite the resistance of Donald Trump to disclose his tax returns, The New York Times has found and disclosed a “decade of in the red” with over $ 1 Billion in business losses.
Such finding may have a serious implications on conflicts of interest, exposure to corruption and nepotism.
This does not mean that becoming President always makes people richer, but it creates doubts and brings governance risks.
What is Governance?
Governance can be defined in many ways. One acceptable definition is how an organization structures or institutionalizes the access to power as well as the sharing and distribution of power and related checks and balances.
A more formal definition is proposed by IBE (International Bureau of Education of the UNESCO)
“Governance has been defined to refer to structures and processes that are designed to ensure accountability, transparency, responsiveness, rule of law, stability, equity and inclusiveness, empowerment, and broad-based participation.”
Types of Governance
Different categories of governance can be identified, because governance can be applied to various organizations and activities where power must be allocated, shared, or distributed with accountability.
When is Governance considered Good? Indicators of Good Governance.
Social media platforms like Facebook, now considered as a *Social Nation* with more than one billion users, and where people interacts with "like," "love," or "share" are having powerful privacy implications and raising many concerns about data security.
This concern has prompted many governments to adopt cyber crime law, cyber security law, and more recently Data Protection Law.
Democracy, Republic & Governance
Democracy and Republic are directly related to governance because they give power to the people, and allow citizens or stakeholders to choose their leaders.
A long time ago, when Democracy was invented as the system to achieve the most reasonable Governance for public affairs, most people had the ability to recognize facts, make their own judgment based what is true and what is false. Their choices and decisions were fair and sound.
Today, with the power to create "illusions" and turn lies into facts, communication technology and especially the Internet and Social media have put democracy at risk of “death”.
The concept of “Fake News” have gained popularity since the presidency of Donald Trump.
An excellent article published in the Washington Post explains how mindless "Likes" and 'shares" on Facebook turn absurd Fake News Reports into reality in America.
As some researchers are pointing out, "Democracy is being transformed into Idiocracy" where cognitive bias is being exploited, used or abused by new players who know how to use the new technology, to achieve questionable objectives.
Need of New Governance
Law-makers around the world are taking steps to respond, to adapt and to redefine "Governance".
Therefore, what shall be new standards of good governance based on the current challenges confronting traditional systems of public governance?
China’s Social Credit System
The first country to be proactive in addressing the issue officially is China.
By creating a "Social Credit system" in 2014 and rolling it out effectively, the Chinese Government is taking responsibility as a sovereign authority, where private social media companies are failing in their governance policy (See Facebook scandals and questioning by the US Senate).
New forms of Punishment
Anyone who violates the law or who appears to be "untrustworthy", who posts fake news on social media, who "likes" "shares" or makes absurd comments, acts without sound judgment, will be punished with:
- Banned from traveling
- Banned from going to some venues
- Banned from doing entertainment or public activities
- Banned from some universities
- Banned from getting married ?
- Banned from many other social “privileges”
It sounds very harsh based on Western standards of freedom and definition of democracy.
But all the Chinese Government is doing is acknowledging that sometimes what matters in Governance, is not doing the "right thing" according to the law, but doing the "things right" according the general interest and necessity of order and control.
US FATCA & OEDCD BEPS
By establishing the Foreign Account Tax Compliance Act (FATCA), which requires all Non-Us financial institutions to search their records for "Us-Person status", the US government has created new rules of governance, tracking down US citizens money wherever they are "hidden" in the world.
Most financial institutions and organizations are complying, which makes it more and more difficult for tax evasion, tax planning or use of tax heavens.
The OECD countries are following the US example with their own Base erosion and profit shifting (OECD project) which refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.
Following financial scandals revealed by the Panama Papers and according to a landmark resolution of the UK Parliament, and other law makers around the world, there is a growing consensus that "Governance" as it is understood, must change.
Doing wrong business governance can also come from creating online business to funnel money out of a country with revenue generation activities, exploiting and abusing gaps and mismatches of law and national systems etc.
Panama Papers and Paradise Papers
The so-called Panama Papers and Paradise Papers are referred to the biggest leaks of legal an financial documents about how the wealthy and famous hide their fortune to avoid tax and hide compromising financial relationships.
The Panama Papers are 11.5 million leaked documents that detail financial and attorney–client information for more than 214,488 offshore entities. The documents, were created and taken from, Panamanian law firm Mossack Fonseca. The leaked happened in 2015 by an anonymous source and was published by the International Consortium of Investigative Journalist (ICIJ).
The Paradise Papers are a set of 13.4 million confidential electronic documents relating to offshore investments that were leaked to the German reporters Frederik Obermaier and Bastian Obermayer from the newspaper Süddeutsche Zeitung. The newspaper shared them with the International Consortium of Investigative Journalists, and a network of more than 380 journalists. Some of the details were made public on 5 November 2017 and stories are still being released.
These publications are having tremendous impacts and ramifications on governance in many countries and causing many law-makers and rulers involved to resign or to be charge and jailed.
Increasing Requirements for Good Governance
Recommendations of the World Bank
In 2018, the World Bank Group launched a new project to review its old governance parameters and guidelines.
The project released an update of the Worldwide Governance Indicators (WGI) based on individual and aggregate governance indicators for over 200 countries and territories for six new dimensions of governance such as:
voice and accountability;
political stability and absence of violence;
Rule of law
Control of corruption.
Corruption, Perception, Indicator
Corruption is considered as the biggest danger for good governance, because it affects all the fundamental principles that are the basis of a functioning and effective democracy.
Considering the damages caused by corruption, organizations such as transparency International have created the (Corruption Perception Index) which gives a note and a ranking countries according to the level of corruption that is perceived.
There is a lot to learn in this annual publication.
We invite our readers to explore the Corruption Perception map to check the corruption index of their own countries and make their own opinions.
Feel free to comment and share your thoughts on this very interesting topic.