Democracy and Economic Competitiveness A Study of 17 OECD Countries Jesús Treviño

1. International Seminar Transformational Governance: The Collision of the Policy Intentions, The Rule of Law, and Reality Democracy and Economic Competitiveness A Study of 17 OECD Countries Jesús Treviño http://www.geocities.com/jtrevino41/supa School of Urban and Public Affairs (SUPA), University of Texas at Arlington, December 15, 2004.

2. Austria Belgium Germany Greece Finland France Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Canada USA Japan Economic Competitiveness and Types of Consensus Democracy Economic Competitiveness = f (Types of Democracy)

3. MADISON, James 1751-1836 LINCOLN, Abraham 1809-1865 Democracy ≠ Plebocracy WEBSTER, Daniel 1782-1852

4. vs Consensus model Majority and minority govern limiting and dispersing the power by bargaining and compromise Majoritarian (Westminster) Model Majority governs and minority opposes

5. Consociationalism Government requires mutual cooperation because no socio-cultural groups have the chance to form the majority. It attempts to integrate several large minorities.Fast decisions (as in the majoritarian or Westminster regimes) are not necessarily wise decisions. Hypothesis: there is no a clear argument about the influence of Consotiationalism on competitiveness.

6. Corporatism It refers to the links between public administration and interest organizations such as trade unions, government and employer’s organizations. Because it directly involves the actor’s interests, Hypothesis: Corporatism explains competitiveness.

7. Federalism It moderates the power of the central government with a system of checks and balances (Madisonian view). It is strong limiting the public expenditure but it does not explicitly aims social (income equality or bigger welfare state) or economic (full employment) goals. Hypothesis: There is no a clear hypothesis about the influence of Federalism on competitiveness.

8. Consociationalism (?) SME or CGI Corporatism (+) Federalist-unity (?) Economic Competitiveness and Types of Consensus Democracy EC = f (TD)

9. 1. SME from the CMS analysis CMS = MSE + SME + GAE + SAE CMS= Constant Market Share MSE= Market Share Effect SME= Structural Market Effect GAE= Market Growth Adaptation Effect SAE= Market Stagnation Adaptation Effect Source: Laursen (1997).

10. 2.Growth Competitiveness Index (GCI) • Technology • Public institutions • Macroeconomic environment Source: Mcarthur and Sachs (2001).

13. Bicameralism Concentration of legislative power in a unicameral legislature versus division of legislative power between two equally strong but differently constituted houses. Constitutional rigidity Flexible constitutions that can be amended by simple majorities versus rigid constitutions that can be changed only by extraordinary majorities.

14. Constitutional rigidity (-) Economic competitiveness finds favorable conditions in countries with agile amendment procedures (flexible constitution), a non-distinctive characteristic of federalism. Bicameralism (+) Economic competitiveness finds favorable conditions in countries with a strong regional representation in the national legislature.

15. Consociationalism Corporatism Federalism Federalist-unity Bicameralism Constitutional rigidity Judicial review Central bank independence SME or CGI

16. CONSTITUTIONAL RIGIDITY