A crucial merit of democracy is that it is inclusive when it comes to political decision making. Since everyone has a vote to decide the government, it should not be necessary, theoretically speaking, to take to the streets to protest or to go on fasts to influence public policy. But we also know that democratic processes can be flawed, which is part of the justification for those street protests. When some people feel that their elected representatives are not truly representing their views, they will look for alternative means to be heard.

The prospects of cuts in social services, pensions, and so on, have brought several such disgruntled groups out into the streets in Greece and Spain, struggling with inefficient economies and immature political processes. Shops are being broken into and public services employees are refusing to work.

But those alternative means need not be burning buses in the streets. They can also be the courts. If you do not like a particular law, you can challenge the government in court, even if the government managed to have the law passed legitimately on the floor of Parliament. That is what is happening in the US where the government's Affordable Health Care Act is facing a challenge in the Supreme Court.

Reforming healthcare

Conservatives did not want the government to do anything about health care. They were quite happy with a system where most decisions were in private hands. They actually got what they wanted, because the government, apart from extending coverage for most people who were being left out, stayed with the private insurance industry providing the coverage. The issue under challenge is whether the government can mandate, or require, everyone to buy health insurance in the country. Their hope is that if the court says that the government's mandate is a violation of the constitution, then the legislation will unravel and it will be years before any other attempt to reform the health care system is made.

The Act has been a red rag for conservatives for a long time. They have been derisively calling it ‘Obamacare' (although President Obama said that he is pleased that his opposition is naming it after his effort to have it more widely available!)

Given the recent track record of the Supreme Court, punters think the Act does not stand much of a chance. Just about two years ago, in a case referred to as the Citizens United case, the court's decision began allowing unlimited corporate, labour union and personal money to support political positions of candidates running for election. Termed ‘superpacs' it takes the efforts of PACs or political action committees a quantum leap. The only requirement is that the candidate should not be directly or indirectly connected with the superpac.

These superpacs have become the means for the very wealthy individuals or organisations to undertake heavy advertising to influence the outcome of elections.

Since the superpacs do not have to reveal who is behind them or is funding their operations, they have become the vehicle for the wealthy to capture the political process mainly through negative advertising that undermines the other candidates. Dummy limited liability companies are formed to route large donations by corporations.

A recent show on the radio called “This American Life” pointed out how these opaque superpacs have influenced the elections of candidates to state legislatures decisively. Prof Acemoglu, an economist who researches the role of institutions, argues that there is a difference between extractive institutions and inclusive institutions in a country. If the institutions are inclusive — allow large numbers of the people to participate and provide equal opportunity for all, then the nation goes from strength to strength. If, on the other hand, the institutions become extractive — a small number get into positions of power and only work to accumulate their power and wealth and exclude many others, then that nation is well on its path to being a failed state.

Disparity in access

Many developing countries struggle with building their institutions. Nigeria, in spite of its enormous oil resources, has struggled to build an inclusive government. But even countries that for many hundreds of years ensured an even spread of access to wealth and power are in danger of slipping.

The wealth disparity in the US was an early indication that access to opportunities is being tampered with. When banks that precipitated the 2008 financial crisis went scot-free, it was a trigger for many Occupy movements. Now come the superpacs . The court's decision (expected in June) on health care will mark another milestone in a path that tells us whether wealth has captured the US political process.

(The author is Professor of International Business and Strategic Management at Suffolk University, Boston, US. blfeedback@thehindu.co.in)

(This article was published on April 22, 2012)
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