Lesson From 2010: more direct democracy, not more representative democracy

Corporate interference

There is also the complaint corporations will fund initiatives. Indeed, a lot of corporate-sponsored CIR issues have gone down in flames and in any event, bribing a legislature of 150 people is easier than bribing 4 million people.

For example, General Growth Properties collected signatures for a referendum in Glendale, California to stop development of a competing mall next door, developed by competitor Caruso Affiliated, in addition to standard political techniques such as lobbying and filing lawsuits challenging the project’s environmental impact report. Ultimately, GGP was unsuccessful at making their case to the voters, and the competing mall was built. Recently, Iceland has discovered the virtue of a referendum (95 per cent of the population rejected harsh austerity measures imposed by them by international bankers). The people are not dumb: they can smell out corruption when they see it.

Wal-Martt too has also used initiatives to bypass planning commissions and city councils to build Wal-Mart Supercenters. Ultimately, the initiative was defeated. I doubt it would have been defeated if campaign contributions were made to the legislature.

Funding and the like could, of course, be regulated by statute - so simple institutional elements could deal with such criticisms. Assembling recent US data from the 1990s, Elizabeth Gerber of the University of California at San Diego, in her 1999 book The Populist Paradox noted, that anyone seeking to have a law enacted or repealed by direct legislation needs to mobilize an electoral majority. To do that calls for two resources (1) money to accommodate their private concerns; and (2) personnel needed to communicate a public purpose.

Economic interests find it easier to raise money, but community organizations with individual members can more easily mobilize people. This is why money is not enough.

But, having said all that, I do not think CIR in California has failed at all (even its critics concede “a mend, don’t end” strategy is best): it has provided better transport services, higher education funding and limited distortive sale taxes. Furthermore, the whole the fiscal situation in California is an oddity (e.g. British Columbia, Australian referendums on state debts, Switzerland, Sweden, Italy and New Zealand maintain fine fiscal ratios) and other US States which have balanced, or close to balanced budget.

Conclusion

Understandably, politicians’ do not want to abdicate their power. CIR, I believe, is less corrupt, more accountable, and conducive to better public debate and better policy outcomes. This is the main reason the system has not been adopted: the politicians’ like power to be in their hands. But overall, it is ridiculous to think that we should let politicians determine our tax policy, education system and transport infrastructure.