Chapter 7: Developed Democracies

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

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