The Real Threat to Democracy: Money Problems

Prudent fiscal stewardship is essential to self-government.
by | July 2014

Critics of democracy -- and they are many -- believe that democratic governments eventually fail because the people will tax themselves less and less while voting themselves ever-increasing benefits. The fact is that failure to exercise prudent fiscal stewardship is one of the surest ways to undermine democracy. (Just ask the residents of Detroit how much democracy they enjoy.) The failure to make wise choices will steadily erode the ability of any entity to control its own fate.

America’s founders conceived of democracy as a form of government controlled by people like themselves: white male property owners. It’s hard not to think that they would see the reforms we have accomplished since -- extending the vote and the opportunity to serve in elected office to the broad swath of ordinary people -- as placing power in the hands of the rabble. But if you believe in the intrinsic value of human beings, then of course the franchise should be shared broadly. In these times we call it crowdsourcing.

Back in February 2013, Governing’s Liz Farmer reported that Iceland used crowdsourcing to create an entirely new constitution following the social unrest from that country’s 2008 banking collapse. In the same piece, she wrote about how the city of Seattle had brought crowdsourcing into decisions on funding priorities and policy decisions. Two months later, Governing’s J.B. Wogan reported on how cities like Hampton, Va., had built ever-broader and earlier citizen engagement into the budgeting process. Wogan’s piece cited research showing a positive relationship between citizen participation in budgeting and measurable improvement in performance outcomes.

This makes sense to me. I believe in the wisdom of regular folks. Otis White, the president of Civic Strategies, has done hundreds of events on citizen engagement. “Citizens,” he says, “are not crazy and there is no reason to fear them.” But citizens need sound information and analysis from public officials, and they need public officials to creatively convene and engage citizens as groups and as individuals. More engagement tends to get better results. Disengagement tends to fuel disillusion among citizens and create apathy. This is not a disease of democracy. It is caused by the lack of democracy.

In April, at a forum at Columbia University, I heard New York Mayor Bill de Blasio give a solid speech outlining many of the goals of his agenda. In a lively panel that followed, Richard Ravitch, who played a central role in guiding New York City through its brush with bankruptcy in the 1970s, repeatedly referred to the financial challenges still faced by New York and cities in general. Ravitch argued that success on other issues depends on meeting those financial challenges. This is an essential point that is often disregarded by those on both the left and the right.

Fiscal stewardship is an essential element of self-government. Delivering value for money -- increasing efficiency and effectiveness in government -- is not just a victory for the wonks and the bean counters. It strengthens and gives life to democracy itself.

Mark Funkhouser  |  Director, GOVERNING Institute
mfunkhouser@governing.com

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