A crisis of governability has beset the Western world. It is no accident that the United States, Europe and Japan are simultaneously experiencing political breakdown; globalization is producing a widening gap between what electorates are asking of their governments and what those governments can deliver. The mismatch between the growing demand for good governance and its shrinking supply is one of the gravest challenges facing the West today.
Globalization was supposed to have played to the advantage of liberal societies, which were presumably best suited to capitalize on the fast and fluid global marketplace. But instead, for the better part of two decades, middle-class wages in the world’s leading democracies have been stagnant and economic inequality has been rising sharply.
The plight of the West’s middle class is the consequence primarily of the integration into global markets of billions of low-wage workers from the developing world. Globalization is not just bringing economic distress to Western electorates, but also confronting them with intensified transnational threats, such as international crime, terrorism, unwanted immigration and environmental degradation.
Voters confronted with these challenges look to their elected representatives for help. But just as globalization is stimulating this pressing demand for responsive governance, it is also ensuring that its provision is in desperately short supply.
For three reasons, Western governments are experiencing unprecedented ineffectiveness.
First, the interdependence born of globalization dilutes the impact of many of the traditional policy tools used by liberal democracies. Struggling Western economies, for example, seem all but immune to stimulus spending and other efforts to foster growth. The scope and speed of global flows of commerce and capital mean that actions taken in Western capitals are outweighed by developments elsewhere, such as Beijing’s intransigence on the value of the renminbi or the actions of international investors and ratings agencies.
Second, the diffusion of power from the West to the rest means that there are today many new cooks in the kitchen; effective action no longer rests primarily on collaboration among like-minded democracies. Instead, it depends on teamwork across a much more diverse — and unwieldy — circle of states. On issues ranging from rebalancing the global economy to isolating Iran, such teamwork is simply out of reach.
Third, democracies can be nimble and responsive when their electorates are content, but they are clumsy and sluggish when their citizens are downcast. Representative governments have proved far better at distributing benefits than at apportioning sacrifice. Rather than shooting straight about the need for shared belt-tightening, vulnerable politicians have been catering to party bases and campaign donors, failing to make the tough choices needed to restore economic solvency.
In the United States, this crisis of governability is taking the form of a paralyzing polarization. Average household income has fallen by 10 percent over the past decade and the country is now the most unequal in the industrialized world. Such harsh economic realities are helping revive partisan cleavages formerly muted by a widely shared prosperity. Congress is tied up in knots, offering voters plenty of partisan bile, but little in the way of substantive legislation.
Meanwhile, Europe is experiencing a dangerous renationalization of its politics. The European Union’s member states are pulling away from the union as electorates revolt against the double dislocations of European integration and globalization. Unemployment has been rising, wages falling, and comfortable welfare systems are on the chopping block. The collective governance that the E.U. sorely needs to thrive in a globalized world is at odds with a political street that is becoming decidedly hostile to the European project.
Japan has cycled through six prime ministers in the last five years. Policy making has ground to a halt even on urgent issues; it took over 100 days for the Diet to approve reconstruction funding for the victims of the tsunami and nuclear disaster. Economic distress is again the root of the problem.
As jobs have moved elsewhere, Japan’s world ranking in terms of per capita G.D.P. has fallen from fourth in 1989 to 24th in 2010. Japan is stuck in a political and economic no man’s land, exposed to the dislocations of a globalized economy, yet absent a government capable of preparing the country to compete effectively.
This crisis of governability within the Western world comes at a particularly inopportune moment. As emerging powers rise, it is not only the West’s material dominance that is at stake, but also its ideological primacy. China’s brand of state capitalism is more than holding its own; Beijing has been adept at reaping globalization’s benefits while limiting its liabilities. Unless liberal democracies can reclaim effective governance, the politics, as well as the geopolitics, of the 21st century may well be up for grabs.
The West urgently needs a compelling answer to the fundamental tensions among democracy, capitalism and globalization. A new political agenda should reassert popular control over political economy. In a globalized world, liberal democracies must turn to strategic planning and state-led investment in infrastructure, education and jobs to restore competitiveness, redress inequality and advantage mass publics rather than the party faithful or special interests.
Until such an agenda is devised and realized, the West’s democratic malaise will persist.
By Charles A. Kupchan, professor of international affairs at Georgetown University and senior fellow at the Council on Foreign Relations. He is the author of the forthcoming book No One’s World: The West, the Rising Rest, and the Coming Global Turn. A longer version of this essay appears in the current issue of Foreign Affairs.