Leadership in government: A comparison between Australia, the US and China

We all know that democracies have a hard time dealing with entrenched special interest groups. It's no different in China; it's just less transparent. The Chinese technocracy tends to govern via a consensus of the top officials. Once a decision is made, new laws are passed, but due to a lack of enforcement these laws are rarely effective. In creating more and more laws and regulations, the government actually increases corruption, as they bestow power on authorities without transparency, while creating legal grey areas.

The gargantuan reforms required to tame this 'stability' beast, as well as the fact that the government will soon have no choice but to move to an economic model based on domestic consumption would indicate that China's rapid ascent is inevitably due for a few speed bumps. Issues surrounding rapid environmental degradation and water problems, as well as the accumulation of local government debt and wobbles in the real-estate sector will also take their toll. Perhaps most significantly, history dictates that when an economy reaches a level of prosperity equal to $10,000 -- $12,000 USD per annum per citizen, they can develop no further without significant political reform and independent institutions.

But are the American and Australian systems much better?

Before we can consider how different they are, we need to pin down what defines the US political system. First, we need an explanation for why American politics and indeed, the psyche of the American people, is far more hostile to government intervention than it is for citizens of other democracies.

This is pretty easy to explain. The founding fathers who drafted the US constitution had just emerged from a war with an imperial power. They wanted to wrestle power from institutions and place it in the hands of the people. Today, these idealistic sentiments have manifested themselves in the form of a strengthened legislature and a dramatically weakened executive (with the exception of security agencies, which have increased in scope and resisted efforts at reform).

Whilst the media, the legislature and the judiciary all wield significant power, in contrast to other western nations, Americans choose to grant little power to regulatory agencies, as this is seen as taking power from democratically elected representatives and placing it in the hands of faceless bureaucrats. This means that independent tribunals are a rarity and expert advice always takes a back seat to political posturing. This is true to an extent in democracies worldwide - an inevitability of a system where an adversarial legislative body wields the most power, but it rings particularly true in the US.

Contrast this with the Chinese system. The Chinese legislature makes laws, but enforcement agencies uphold them on an ad-hoc, often politically or personally driven basis. In the US, you have a system where laws are argued over and picked apart, the result being watered down. In China, you have sweeping, often poorly considered or politically driven laws, which are only applied as certain individuals see fit.

So how does Australia compare?

Although Australia doesn't have quite the same distrust of the executive that exists in America, it is often difficult for governments to implement policies formulated by the executive. Instead of following through on recommendations for reform, recent Australian governments have instead found that the creation of review panels or tribunals has been an effective way of avoiding tough decisions.

The rejection of all but the most politically palatable aspects of last year's Henry Tax review provides a good example of the legislature failing to keep pace with the executive. The fact that the most contentious recommendation, the mining super-profits tax was buried, but ultimately just watered down, along with former PM Kevin Rudd's Prime Ministership, demonstrates the perils of attempting reform. This was despite the fact that the tax only taxed profits and that the mining companies had been making record profits despite recessions in the US and Europe. The recent commentary regarding a 'two speed' economy would seem to indicate that the tax was indeed a necessary reform, but fell prey to vested interests.

So it would seem that where Australia and the US find it difficult to agree and launch reforms, China can do so with ease, however on the implementation side of the equation, developed nations have a far greater advantage. For most western nations, the difficulties lie in decision-making. But, in developed countries, implementing them is almost impossible.

In times of crisis however, it is easier to push through greater reforms – consider the vast stimulus packages that were unleashed throughout the developed world during the recent financial crisis. Ordinarily, spending of that magnitude would provoke intense political wrangling, but opponents were spooked in the face of economic meltdown. This would appear to be a point in favour of western-style democracy. In China, large swathes of those stimulus packages were pumped into the hands of developers and local governments, with the after-effects of that spending spree now being felt.

Since Deng Xiaoping's economic reforms of the 1970s, China has been on a path of steady growth and the Chinese Communist Party has reaped the rewards. They have yet to face a recession. The American economy is slowly emerging from one, bruised but still standing, while European lawmakers are still figuring out how the Eurozone can do so as a single unit. Individually however, many of the European political systems have extensive experience in dealing with economic hardship, which bodes well for their ultimate recovery.

Given the challenges that await China and the leadership's inability to tolerate external criticism, constructive or otherwise, it's not at all certain as to whether their leadership will possess the same resilience when faced with a recession. This is especially problematic when you consider that they have predicated their legitimacy on 8% economic growth per annum – and even if this is accomplished, what happens when they reach the $10,000 to $12,000 economic tipping point mentioned earlier? The difficulties faced by developed democracies pale in comparison to the seriousness of the challenges faced by the Chinese leadership.

Ultimately, the Chinese political system is a work in progress, which has yet to face the kinds of shocks that developed democracies have proven capable of withstanding. Until they prove they can do so, it seems that the pundits who predict China's ascendancy are getting too far ahead of themselves.