Part 2 – How Important is “Trust” in Economic, International, and Constitutional Law?

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Our Distrust is very expensive.

Ralph Waldo Emerson

On September 23, 2013 the Secretary General for the Organization for Economic Co- operation and Development (OECD) stated at a conference that public trust is one of the most precious assets that a country can have; it is the cornerstone of effective governance, the main ingredient to promote economic growth and social progress.(253) According to a Gallup World Poll, the average confidence in national government in OECD countries stood at 40% in 2012 (down from 45% in 2007).(254) This means that the majority of populations in OECD countries do not trust governments.(255) These numbers are not just a statistical variation or temporary slump.(256) They reveal a major fracture in our social contract; to such an extent it questions, in the mind of an increasing number of people, the legitimacy of the authority of the State over individuals.(257)

In the absence of trust in government no policy, no reform, will be ambitious or effective enough to reactivate our economies and leave the crisis behind.(258) Rebuilding trust has become strategic for the global economic recovery but even worse, for the viability of the state.(259)

The OECD believes the nations need a national strategy for trust and recommend a trust strategy be built on three strong pillars: integrity, transparency, and engagement.(260)

Integrity

Integrity is key to restoring trust.(261) There are a high number of citizens who believe that corruption in government is widespread: It’s three-quarters of the population in the U.S., and almost 90% in Italy, Greece, and Portugal.(262) The distrust between citizens and the political process is also alarming.(263) According to the 2011 Transparency International Europe Barometer, almost 50% of respondents view their political parties as corrupt or extremely corrupt.(264) For example the U.S. national surveillance revelations are showing that the U.S. government and its collaborators are just as interested, if not more so, in economic espionage as they are in the fight against terrorists.(265) This prompted the President of Brazil to cancel her state dinner with Barack Obama until he could satisfy her questions around why the U.S. government was spying on her personal emails and infiltrating the systems of Brazilian state gas and mining companies.(266)

Transparency

Transparency is crucial across so many domains, including for budget and tax transparency.(267) Citizens want to know how their money is being spent.(268) This is only fair.(269) Governments must be held accountable for their budget spending in a transparent and comprehensible way.(270) This means publishing and communicating digestible budget data.(271) In the case of the U.S. National Surveillance revelations, the U.S. Citizens deserve to know why their government spends billions of dollars collecting their information for vague and measureless reasons.(272)

Transparency of the tax system is critical to building trust in policies and policy outcomes.(273) Societies want to feel that they are paying a “fair share” of the tax bill. In today’s world – wrong or right – there is a perceived unfairness of tax policy outcomes, which needs to be tackled to build back trust.(274) For example in the U.S. the Affordable Care Act which is just now being implemented but too few people, including the government, know neither how the law actually works nor what the intended or unintended consequences will look like.(275)

Engagement

The final pillar is engagement.(276) It is time to get serious about Open Government as an interactive process that promotes inclusive response policy making through real engagement with citizens.(277) Trust is not only about tackling corruption and putting government data on websites, it is also about giving citizens a voice in the process, and ensuring that public services are well adapted to people’s needs.(278) This should be seen as an attempt at recovering faith in democracy as an effective system to improve lives.(279)

Like never before, governments have access to a myriad of techniques and tools to involve people in governmental action.(280) The OECD Observatory of Public Sector Innovation is gathering examples of good practice from across the globe to support governments in identifying innovative ways to deliver public services and reach out to communities.(281)

These are the three pillars of the OECD strategy for trust.(282) If governments implement measures to make progress on these three objectives they will gradually start rebuilding the confidence that makes our economies work, our societies progress, and for people to exercise their imaginations about the life they seek to live.(283)

Because there is so much at stake in this crisis of trust, the lack of trust in public policy has large economic and social costs because it is delaying the recovery for all of us, postponing the creation of jobs, scaring investments away.(284) But beyond these important economic implications, there lies a bigger risk: the degradation of our confidence on the state as a moral entity; our lack of enthusiasm for the political system we have collectively built through hundreds of years in Western civilization: It is democracy itself that is at stake.(285)

In my next post I will provide a conclusion to Part 2.

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