Leadership in Government – A Comparison between Australia, the US and China

This is a piece I wrote for Online Opinion. I’m reproducing it here. It details some differences in governing styles between China, the US and Australia.

Leadership in Government – A Comparison between Australia, the US and China.

Whether their economies are thriving or in recession, the people of Western countries are understandably disillusioned with their governments at present. But how do they stack up when compared with the Government of a country many predict will eclipse the US?

Quality of leadership is hard to measure. In times of crisis it can be easy to recognize good or bad leadership, but most of the time it’s just something that hovers in the background.

Despite this, I’ll attempt to try to pin down some differences in modern leadership styles by looking at leadership in three different nations – Australia and the world’s two most prominent superpowers, the US and China.

Quantifiable criteria fail miserably to measure leadership. Take Australia for example. The Australian economy is the envy of the developed world and yet the polls indicate Australians are more displeased by their leaders than at any time in recent memory.

When Bill Clinton used the catch phrase “it’s the economy, stupid” to unseat President Bush in the early 1990s, it would appear he was correct for that place and that time. Australians today, however, would seem to disagree. An effective catchphrase has yet to be developed that encapsulates contemporary Australian politics, but you can be sure more than a few political analysts are trying to make one.

One might argue that leadership has taken a backseat to bureaucracy in recent years. The US government is deadlocked in bitter partisan political wrangling, as is the knife-edge Australian parliament, while the Chinese have perfected technocratic consensus decision-making to an art form.

It’s easy to lavish praise upon the Beijing model, but there are many reasons to believe that the recent growth enjoyed by Chinese citizens has come at a heavy cost to Chinese society as well as the environment and the economy.

It’s also worth considering the fact that a number of economists have very good reasons to argue that the US isn’t falling behind China as such, rather, the rest of the world is simply catching up with the US. Many of the problems that China is facing can be directly traced to the country’s style of leadership – and the recent growth has masked very serious structural problems.

Behind China’s GDP story lie a number of unsustainable trends in terms of leadership. China now spends more money and employs more people on stability preservation than it does on the People’s Liberation Army (PLA). This essentially, has become a catchphrase for the suppression of riots and dissenting voices. It wouldn’t be so much of a problem if it was a centralized effort, but the bulk of this power has been placed in the hands of local governments, who can use it to jail their critics with impunity.

The recent furore surrounding the imprisonment of blind activist Chen Guangcheng is often attributed to the untrammelled power of the Chinese government. But in reality, it may be more accurate to see it as the central government’s impotence when faced with wayward, rent seeking local governments. It’s a situation that hurts the central government, but it’s in the local government’s interest to keep it going. As one commentator notes:

From this perspective, these thugs are the ones who do not want to see Chen get free. In numerous stability maintenance events, I describe these vested interest groups of stability professionals as “black hole interests.” They have the strongest desire to keep the stability machine running, and are the front line running dogs in this “battle.” The prospect of this stability interest group being destroyed is slim.

It’s a stark contrast to the sweeping power of the Chinese State typically portrayed in Western media and is an apt illustration of the limits of Chinese leadership. In creating a self-sustaining stability-preservation monster, the Chinese government has accelerated dissatisfaction rather than slowed it down.

We all know that democracies have a hard time dealing with entrenched special interest groups. It’s no different in China; it’s just less transparent. The Chinese technocracy tends to govern via a consensus of the top officials. Once a decision is made, new laws are passed, but due to a lack of enforcement these laws are rarely effective. In creating more and more laws and regulations, the government actually increases corruption, as they bestow power on authorities without transparency, while creating legal grey areas.

The gargantuan reforms required to tame this ‘stability’ beast, as well as the fact that the government will soon have no choice but to move to an economic model based on domestic consumption would indicate that China’s rapid ascent is inevitably due for a few speed bumps. Issues surrounding rapid environmental degradation and water problems, as well as the accumulation of local government debt and wobbles in the real-estate sector will also take their toll. Perhaps most significantly, history dictates that when an economy reaches a level of prosperity equal to $10,000 — $12,000 USD per annum per citizen, they can develop no further without significant political reform and independent institutions.

But are the American and Australian systems much better?

Before we can consider how different they are, we need to pin down what defines the US political system. First, we need an explanation for why American politics and indeed, the psyche of the American people, is far more hostile to government intervention than it is for citizens of other democracies.

This is pretty easy to explain. The founding fathers who drafted the US constitution had just emerged from a war with an imperial power. They wanted to wrestle power from institutions and place it in the hands of the people. Today, these idealistic sentiments have manifested themselves in the form of a strengthened legislature and a dramatically weakened executive (with the exception of security agencies, which have increased in scope and resisted efforts at reform).

Whilst the media, the legislature and the judiciary all wield significant power, in contrast to other western nations, Americans choose to grant little power to regulatory agencies, as this is seen as taking power from democratically elected representatives and placing it in the hands of faceless bureaucrats. This means that independent tribunals are a rarity and expert advice always takes a back seat to political posturing. This is true to an extent in democracies worldwide – an inevitability of a system where an adversarial legislative body wields the most power, but it rings particularly true in the US.

Contrast this with the Chinese system. The Chinese legislature makes laws, but enforcement agencies uphold them on an ad-hoc, often politically or personally driven basis. In the US, you have a system where laws are argued over and picked apart, the result being watered down. In China, you have sweeping, often poorly considered or politically driven laws, which are only applied as certain individuals see fit.

So how does Australia compare?

Although Australia doesn’t have quite the same distrust of the executive that exists in America, it is often difficult for governments to implement policies formulated by the executive. Instead of following through on recommendations for reform, recent Australian governments have instead found that the creation of review panels or tribunals has been an effective way of avoiding tough decisions.

The rejection of all but the most politically palatable aspects of last year’s Henry Tax review provides a good example of the legislature failing to keep pace with the executive. The fact that the most contentious recommendation, the mining super-profits tax was buried along with former PM Kevin Rudd’s Prime Ministership, demonstrates the perils of attempting reform (although the tax is still being debated, in a watered-down form). This was despite the fact that the tax only taxed profits and that the mining companies had been making record profits despite recessions in the US and Europe. The recent commentary regarding a ‘two speed’ economy would seem to indicate that the tax was indeed a necessary reform, but fell prey to vested interests.

So it would seem that where Australia and the US find it difficult to agree and launch reforms, China can do so with ease, however on the implementation side of the equation, developed nations have a far greater advantage. For most western nations, the difficulties lie in decision-making. But, in developed countries, implementing them is almost impossible.

In times of crisis however, it is easier to push through greater reforms – consider the vast stimulus packages that were unleashed throughout the developed world during the recent financial crisis. Ordinarily, spending of that magnitude would provoke intense political wrangling, but opponents were spooked in the face of economic meltdown. This would appear to be a point in favour of western-style democracy. In China, large swathes of those stimulus packages were pumped into the hands of developers and local governments, with the after-effects of that spending spree now being felt.

Since Deng Xiaoping’s economic reforms of the 1970s, China has been on a path of steady growth and the Chinese Communist Party has reaped the rewards. They have yet to face a recession. The American economy is slowly emerging from one, bruised but still standing, while European lawmakers are still figuring out how the Eurozone can do so as a single unit. Individually however, many of the European political systems have extensive experience in dealing with economic hardship, which bodes well for their ultimate recovery.

Given the challenges that await China and the leadership’s inability to tolerate external criticism, constructive or otherwise, it’s not at all certain as to whether their leadership will possess the same resilience when faced with a recession. This is especially problematic when you consider that they have predicated their legitimacy on 8% economic growth per annum – and even if this is accomplished, what happens when they reach the $10,000 to $12,000 economic tipping point mentioned earlier? The difficulties faced by developed democracies pale in comparison to the seriousness of the challenges faced by the Chinese leadership.

Ultimately, the Chinese political system is a work in progress, which has yet to face the kinds of shocks that developed democracies have proven capable of withstanding. Until they prove they can do so, it seems that the pundits who predict China’s ascendancy are getting too far ahead of themselves.

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