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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

Participation

Competition

Liberties

Referenda and initiatives are used in varying degrees.

Different methods and levels of funding are used for political parties and campaigns.

Distinctions exist in the regulation, allowance, or prohibition of activities such as abortion, prostitution, and hate speech.

Separation of powers varies greatly and is primarily on the relative strength of different branches of government.

Different degrees of individual privacy are protected from state and corporate intrusion.

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

KP

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

Participation

Competition

Liberties

Referenda and initiatives are used in varying degrees.

Different methods and levels of funding are used for political parties and campaigns.

Distinctions exist in the regulation, allowance, or prohibition of activities such as abortion, prostitution, and hate speech.

Separation of powers varies greatly and is primarily on the relative strength of different branches of government.

Different degrees of individual privacy are protected from state and corporate intrusion.

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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