Defining Developed Democracies

What is a “Developed Democracy”?

• Developed democracy: a country with institutionalized democracy and a high level of economic development

• Formerly referred to as “First World”

• Developed democracies are contrasted with “communist and postcommunist countries” and “developing countries.”

• These terms are also falling out of favor: In 2016, the World Bank began phasing out “developed” and “developing” as classifications.

Developed Democracies Around the World

• Predominantly Europe and the Americas, but an increasingly diverse category.

• Grouping countries by institutional similarities is a useful way to compare and study political systems.

Key Characteristics of Developed Democracies

• Strong economic and political liberties

  • Liberal democracy, private property, free markets

  • Service-based industry

• Higher or upper-middle income ratings

• Very high or high levels of human development (HDI)

• Postindustrial societies

Mexico’s Transition to a Middle-Class Society

• Dramatic socioeconomic shift over past twenty years

• Has become a developed democracy

• One of the world’s most open economies

• Dependent on trade of manufactured goods

• Reduced its heavy dependence on oil trade

• Experienced an unprecedented period of political stability and economic growth

• Allowed many Mexicans to ascend to the middle class and move to more urban areas

• Not everyone has benefitted equally

  • Millions of small farmers have been driven out of business due to competition from US imports

  • Economy unable to produce enough jobs

  • Thus, many poor Mexicans seek employment north of the border

Freedom and Equality in Developed Democracies

Balancing Freedom and Equality

• Developed democracies reconcile freedom and equality differently.

• Often relates to their political-economic systems

  • Liberal systems emphasize freedom.

  • Social-democratic systems emphasize equality.

  • Mercantilist systems focus on development rather than freedom or equality.

Freedom and Equality: Political Differences

• Differences in liberty (freedom)

  • Different civil rights and liberties

  • Differences in constitutional court strength and activism

• Differences in participation

  • Voter laws: eligibility, registration rules, and compulsory versus voluntary voting

  • Referenda and initiative use

• Differences in competition

  • Electoral systems

  • Campaign funding rules

  • Executive power and type (“separation of powers” or not)

In Focus: Political Diversity in Developed Democracies

Freedom and Equality: Economic Differences

• All promote economic freedom through capitalism

• Differences in promoting equality:

  • Wealth redistribution (taxation; welfare spending)

  • Provision of public goods

  • Job protection and/or unemployment insurance

Contemporary Challenges for Developed Democracies

Modern and Postmodern Politics

The value transition: from modern to postmodern

• Modern: characterized as secular, rational, materialistic, technological, and bureaucratic, and places a greater emphasis on individual freedom

• Postmodern: characterized by a set of values that center on “quality of life” considerations and give less attention to material gain

Big questions

• What does this transition mean for politics?

• How much change is really occurring?

Modern vs. Postmodern Values

Modern

• Prioritizes

  • Rationality and science

  • Individualism and autonomy

  • Progress and material obtainment

• Rejects the obedience and collectivism of traditional values

Postmodern

• Prioritizes “quality of life” issues

  • E.g., environment as public good

  • Equality and social justice

• Skepticism regarding

  • Science and technology

  • Nationalism and patriotism

  • Authority and hierarchy

Political Institutions: Sovereignty Transformed?

Two Modern Trends Challenging the State System

• International integration

  • Process by which states pool their sovereignty, surrendering some individual powers in exchange for political, economic, or societal benefits

  • Increases power and authority of international and regional organizations

• Devolution

  • Process of devolving, or “sending down,” political power to lower levels of government

  • Increases the power and authority of subnational governments

The Origins of the European Union

• Post WWII: Goal to prevent another European war

  • 1950 Schuman Declaration

• 1951: European Coal and Steel Community (ECSC) created

  • Six countries: France, Germany, Italy, Belgium, Netherlands, and Luxembourg

  • Functional cooperation on coal and steel

Timeline of European Integration

• 1950s-1960s: increasing integration

• 1970s: Membership expansion; EU parliament directly elected

• 1980s: Former nondemocracies join

• 1990s-early 2000s: EC becomes EU; euro introduced; massive expansion in membership

• Late 2000s-present: EU in crisis (euro economic crisis, Brexit)

Major EU Institutions: The European Council

• Sets the “general political direction and priorities” of the EU

• Heads of government/state of EU member states

• Meets four times a year at European Summit

• Elects the EU president

  • President serves 2.5-year terms

Major EU Institutions: The European Commission

• Led by 27 members plus a president of the commission

  • 27 members: one per member state

  • President chosen by the European Council and approved by European Parliament

  • Oversees a very large bureaucracy

• Most powerful EU institution

  • Initiates proposals

  • Manages EU agencies

  • Monitors implementation of EU treaties

Major EU Institutions: The European Legislature

• EU is a bicameral legislature.

  • For EU policy to pass, it needs approval from both “houses.”

• European Parliament (EP)

  • Directly elected by EU voters using PR rules

  • Serves for 5-year terms

• Council of the European Union (“The Council”)

  • Appointed ministers of member states

Major EU Institutions: The European Court of Justice

• 27 judges; led by a president

  • Serves for 6-year renewable terms

• Highest court

  • Decides whether states are complying with EU laws.

  • Adjudicates between member states, EU, and citizens.

• EU law supersedes national laws.

The European Union: Integration, Expansion, and Resistance

• The EU: the path toward supranational governance

• Intergovernmental system: a system in which two or more countries cooperate on issues

• Supranational system: an intergovernmental system with its own sovereign powers over member states

Major Challenges to EU Integration

• “Democratic deficit”

  • EU as an elite-driven project

• Euro crisis

• EU enlargement

  • Immigration, jobs, and the Brexit pushback

The Euro: the Hopes, and What Worked

• The hopes

  • Common prices would stimulate trade and cross-border investment.

  • One currency would foster a single European identity.

  • Increase the EU’s international power

    • Euro as a “reserve currency” for other countries

• What worked

  • Expanding international economic power by becoming a reserve currency

The Euro: What Didn’t Work

• The problems created

  • Economic dependencies

  • Trade deficits

  • Debt crises

  • An increasing North-South divide

EU Expansion and the Rise of the Far Right

• The hopes

  • Spread democracy, promote economic transitions

  • Increase EU influence: economics, politics, and population

• What worked: economic and political reform

• The problem: emerging tensions over immigration and jobs

• The response: Brexit and rise of far right

Devolution and Democracy

• A second challenge to state (national) sovereignty: devolution

  • The challenge “from below”

• Political trend toward greater power for subnational government

  • Motivation comes from an in-public mistrust of the state (central government)

  • Devolution is seen as a way to bring government closer to the people.

In Focus: Means of Devolution

• Transfer of policy-making responsibility to lower levels of government.

• Creation of new political institutions at lower levels of government.

• Transfer of funds and taxation powers to lower levels of government, affording them more control over how resources are distributed.

Arguments For and Against Devolution

• In favor:

  • Improves trust in government

  • Represents marginal communities

  • Improves citizen engagement and ability to shape politics

• Against:

  • Undermines state capacity and autonomy

  • May destabilize ethnic relations and empower separatists

Societal Institutions: New Identities in Formation?

An Evolution of Means

• Traditional: obedience and authority

• Modern: rationality and science, individualism and autonomy

• Postmodern: challenged modernism from multiple angles

Why the Transition to Postmodernism may be Overstated

• Religious/cultural heritage shapes societal values irrespective of a state’s level of development.

• Progress to postmodernism is not a smooth transition.

  • Economic development (stagnation or inequality) can lead to value “backsliding.”

  • Traditional and survival values are prioritized in times of economic hardship.

Diversity, Identity, and the Challenge to Postmodern Values

• New realities: Unprecedented wave of immigration to developed democracies

• Different developed democracies, different immigration populations

  • United States: Latin American immigrants

  • Canada, Australia, and New Zealand: Asian immigrants

  • Europe: North African and Middle Eastern immigrants

Reactions to this Immigration Wave

• Rising xenophobia

  • Fears that immigrants compete for scarce jobs and depress wages

• Debates over national identity and societal inclusion

  • Should states promote multiculturalism or assimilation?

  • Fear of identity shifts reinforces xenophobia and racism, undermines postmodern values.

• Cultural shifts and growing divergence in developed democracies

  • May undermine secular, postmodern values

Economic Institutions: A New Market?

Postindustralism in Developed Democracies

• Twentieth century: Manufacturing and industry

  • Focus on tangible goods

  • Examples: cars or computers

• Twenty-first century: Service sector

  • Focus on intangible goods

  • Examples: finance, insurance, real estate, education, retail sales, transportation, communication, high technology, utilities, healthcare, and business and legal services

Main Reasons for the Postindustrial Shifts

• Lower labor and production costs in developing countries

  • Trend accelerated by globalization

• Technological innovation

  • Reduces need for low-skill labor (and some high-skill labor)

  • Requires more education for entry-level positions

  • Result: Less economic opportunity and labor mobility

The Opportunities and Challenges of the Tech Economy

• Some new economic opportunities

  • Programmers, developers

  • “Gig labor”

• Significant economic damage

  • Manufacturing job loss

  • Many new jobs offer less pay and less economic security

Major Consequences of Postindustrial Economies

• Rising inequality

  • Challenges the balance of freedom and equality

• Increasing demands for policies that may reduce economic freedoms

  • Raises demands for trade barriers

  • Greater demands for income redistribution

  • Limitations to immigration and globalization

    • Linked to xenophobia and rejection of postmodernism

The Welfare State: The Benefits

• Less extreme poverty

• Lower infant mortality

• Increased life expectancy

• Improved literacy and education

• Big picture: better economic opportunities

TWS: Controversies and Challenges

• Increasingly expensive

  • More programs require more money

• Trends magnified by a growing demographic crisis

  • Working age population aging and shrinking

  • Less taxes paid in, more expenditures paid out

  • Higher wages = higher labor costs = less business profit = less businesses = fewer jobs

Potential Policy Solutions and Their Problems

• Increase labor force size (immigration; increased retirement age)

  • Significant public backlash

• Cut welfare benefits

  • Less spending on health and education undermines long-term growth.

  • Rising frustrations may trigger protests or riots.

• Increase government debt.

  • Unsustainable (see Greece; Japan)

• Raise taxes

  • Voters do not like this.

  • Firms or wealthy individuals may leave the country to avoid taxes.

• Technical fixes

  • Require effective political oversight

In Sum: Developed Democracies in Transition

• Developed democracies are countries with institutionalized democracy and postindustrial economies.

• These countries prioritize freedom and equality but differ in how they find the balance between each other.

• These countries have long been dominated by modern political values, but may or may not be transitioning to postmodern values.

• Developed democracies face a number of recent challenges.

  • Sovereignty has been challenged by international integration and devolution trends.

  • Societal institutions are challenged by postmodern shifts and increasing diversity brought on by immigration.

  • The traditional economic status quo has been uprooted by postindustrial development and rising social welfare costs.

• Overall, these countries are characterized by the greatest freedom and best quality of life in the world, but they also are facing a number of challenges that can improve or undermine this prosperity.

Key Terms

1. Developed democracy - a country with institutionalized democracy and a high level of economic development

2. Intergovernmental system - a system in which two or more countries cooperate on issues

3. Modern - characterized as secular, rational, materialistic, technological, and bureaucratic, and places a greater emphasis on individual freedom

4. Postmodern - characterized by a set of values that center on “quality of life” considerations and give less attention to material gain

5. Supranational system - an intergovernmental system with its own sovereign powers over member states