Do checks and balances reduce efficiency?
By Scott Sumner
Commenter msgkings recently made the following observation about the factors behind China’s rapid growth:
China has only one party so they are all working together to get growth (and of course stay in power doing exactly that). In the US the two parties now hate each other and prefer fighting to working together. Solving problems isn’t really high on their agenda.
I understand how that argument might seem appealing. A strong leader would be better able to push through needed reforms, and one can find (cherry pick?) a few examples to support this claim, such as Lee’s Singapore.
But does this hold up to close scrutiny?
Beijing has yet to implement the hundreds of bold reforms promised by Mr Xi in 2013 on which its economic future depends. Among Chinese officials, the new mantra is “just wait for his second term”.
Widely recognised as China’s most ambitious and powerful leader since Deng Xiaoping, Mr Xi has won plaudits for his graft purge and more muscular foreign policy. “His biggest achievement has been the elimination of political rivals through the anti-corruption campaign,” says Zhang Lifan, a Beijing-based historian.
Accomplishments in the economic realm, especially the party’s promise to give the market “a decisive role in resource allocation”, are harder to identify.
“Economic reform has not been as fast as many of us expected,” admits one Chinese official. However, he says the pace will pick up after Mr Xi has installed more of his lieutenants in key posts at the year-end party congress that will start the clock on his second term.
Don’t we hear that a lot in the United States? “Once re-election is secured, the President will be able to finally push through some needed but controversial policy reforms.” In fact, American Presidents are often less effective in their second terms.
Although China is not a democracy, it does have a highly complex government structure with many powerful special interest groups. Top leadership positions are filled by the votes of various committees, where different factions advocate their agendas. There’s no doubt that President Xi is more powerful than his immediate predecessors. But even Xi has great difficulty pushing through his reforms.
In the end, I see checks and balances as a feature, not a bug. For every Lee Kwan Yew there are a dozen Mao, Pol Pot, Stalin, Kim Jong Un, Idi Amin and Enver Hoxha-type figures.
Beware of strong leaders.