Thursday, 9 June 2011

Screws and bolts: the Italian prime minister and the opposition

In the latest issue of The Economist, an article is about the Italian prime minister Silvio Berlusconi . It starts with the following title: The man who screwed an entire country .

The articles describes the reasons why the prime minister is deemed unfit for office in Italy, an opinion that The Economist has put forward since 2001, and its consequences for the country. In 2003 the magazine also posed the prime minister 6 questions about the determinants of his past achievements as entrepreneur. Such question offer useful information to also assess why the entrepreneur turned to politics.

While the analysis in all such articles is accurate, its focus is 100% on the government coalition, rather than also on the opposition, thus omitting information that helps to explain the long survival in office of the controversial Italian entrepreneur, who firstly ran for elections in 1994.

In short, the reason why the centre-left parties or coalition party have only managed to win over Berlusconi, and the centre-right coalition party,  twice in elections is the lack of pragmatic focus on the ingredients to win democratic elections. One needs 50.1% of consensus by voters to buy a party and its candidate prime minister the right to rule a country. Sounds rather easy, hey!

However, adverse selection of member of parliaments and party leaders, the tendency by politicians to preserve (in)direct control over the public administration and firms in (little) competitive markets, and shifting the balance towards "political engineering", rather a balance of this and also grassroots politics, leave too little time for a busy candidate standing against Silvio Berlusconi in elections to also focus on counting the votes that one would get in exchange for pragmatic ideas that are spelled out simply, and tend to buy votes!

This problem leads to a double consequence for both end of the political spectrum in Italy: the centre-left coalition struggles to find a candidate that can deliver in elections, and instead focuses on little constructive criticism of the opponents. As per the centre-right coalition, it heavily depends on the entrepreneur-politician Silvio Berlusconi. Voters in the country face a similar problem to an agency problem in their support to either of party in a simplified 2-party system, and in delegating his preferences over what (not) do to in a country.

Voters are principals in their rights as citizens to delegate to a politician, who may or may not put all the effort in winning elections. Easier shortcuts than winning 50.1% of votes include quarrelling with colleagues over abstract ideas and plans (see Peoples' Front of Judea in Monty Python's Life of Brian !) The delegation problem is made even more difficult by the fact that the tasks that a politician carries out to win votes and elections are multidimensional in nature: competing with other politicians, campaigning by talking to households, firms or lobbyists, media coverage, considering alternative jobs to politics, fending corruption attempts, etc.  A way to describe this in words is that delegation is multidimensional in nature (see this link for a similar example that applies to managers in the private sector). This makes the game sound less easy, hey!

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