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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
Explore why we feel stuck with our democracies, and radical new visions for governing ourselves and the planet
In The Next Democracy, social entrepreneur and Founder of Donkey Republic, Erdem Ovacik, delivers a startlingly insightful discussion of a new collective governance model based on markets and data that can improve our wellbeing as individuals, and as a society.
The author explains how we can develop the next generation of government that is data-driven, iterative, transparent, and that we decentrally and directly make laws online using prediction markets and delegate voting.
Using same principles of data and market, the author also explores delivery of public goods, where we link products and services' externalities to measurable metrics we collectively care about altering business models, and removing the dichotomy of consumerism and public service.
You'll explore how we can assign real value to our public goods, changing the way we think about valuation and budgets for public spending. Filled with case studies, illustrations, new governance models and frameworks, and key takeaways and summaries of each chapter, you'll also find:
- A comprehensive explainer of the challenges caused by a collective inability to protect and deliver public goods
- Discussions of how to develop transparent, decentralized institutions that align private and collective interests to deliver public goods using markets and data
- An exploration of “Merit Democracy,” a radically new form of democracy
Perfect for citizens who seek fresh visions for democracy, and young professionals and impact entrepreneurs who want to work towards creating impact. The Next Democracy is also a must-read for those who seek change through their investments to see the role they can play for a clear vision for a world we can all happily live in.
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Seitenzahl: 414
Veröffentlichungsjahr: 2025
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Table of Contents
COVER
TABLE OF CONTENTS
TITLE PAGE
COPYRIGHT
DEDICATION
INTRODUCTION
CHAPTER ONE: EXODUS FROM POPULISM
THE GROWING MISTRUST IN PUBLIC GOVERNANCE
DIGGING INTO THE REPRESENTATION PROBLEM
QUALITIES OF GOOD GOVERNANCE
EXCESSIVE INEQUALITY UNDERMINES DEMOCRACY
PUBLIC GOODS: WHAT MONEY CAN’T BUY
WHEN MONEY NO LONGER MEANS VALUE
TECH WILL SAVE US: THE TECH-NAIVE STORY
FILLING THE VOID? CHARITY, IMPACT-INVESTING, CORPORATE SOCIAL RESPONSIBILITY
OUR FOUR ECONOMIC HATS: THE CONSUMER, INVESTOR, LABORER, AND THE CITIZEN
CHAPTER TWO: DEMOCRACY’S CROSSROADS: INNOVATE OR DIE
INNOVATING COMPANIES WIN, BIG TIME
EVOLUTION THRIVES WITH EXPERIMENTATION
GETTING INNOVATION INTO THE GOVERNMENT
DYSTOPIAN OUTCOMES OF DYSFUNCTIONAL DEMOCRACIES
CHAPTER THREE: BREWING CHANGE FOR LEGISLATION
EXPERIMENTS WITH VOTING
PARTICIPATORY BUDGETING
CITIZEN ASSEMBLIES
DIGITAL CHANGEMAKERS FROM WIKILEAKS TO LIQUID DEMOCRACY
DAOS – DECENTRALIZED AUTONOMOUS ORGANIZATIONS
CHAPTER FOUR: THE STRUGGLE TO DELIVER PUBLIC GOODS
HOW DID WE GET HERE?
FROM LEADING TO FIRE-FIGHTING
THE MOVE TOWARD PRIVATIZATION
RETHINKING PUBLIC PROCUREMENT
EFFICIENT BUT NOT EFFECTIVE
BUYING GOODS FROM COMPANIES BASED ON OUTCOMES
PRICING WHAT MATTERS
BEYOND ESG AND CSRD
CHAPTER FIVE: MERIT DEMOCRACY: THE WAY FORWARD
HOLDING OURSELVES ACCOUNTABLE
EXPERIMENTING OVER FORECASTING
EMBRACING MARKETS FOR PUBLIC GOODS
EMPOWERING PUBLIC GOODS WITH (BIG) DATA
TRANSPARENCY BREEDS LEGITIMACY
AN OPEN AND INCLUSIVE DESIGN
CHAPTER SIX: MERIT DEMOCRACY IN A BICYCLE
THE FRONT WHEEL: LEGISLATION IN MERIT DEMOCRACY
THE BACK WHEEL: DELIVERY OF PUBLIC GOODS IN MERIT DEMOCRACY
THE HANDLEBAR: TAKING OWNERSHIP OF OUR CHALLENGES
THE BIKE FRAME: ROLE OF STATE IN MERIT DEMOCRACY
CHAPTER SEVEN: REASONS TO REMAIN CAUTIOUS
DIGITAL LITERACY AND ACCESS
LOSING THE PERSONAL TOUCH
LIMITS TO MEASURING
WE SHOULD FOCUS ON DEGROWTH
FIGHTING THE ENEMY IS PRIORITY
PRONE TO MANIPULATION
PRIVACY AND DATA SAFETY
TRAPPED IN SILOED THINKING
EXPERIMENTATION IS WELL WORTH THE RISKS
CHAPTER EIGHT: THE MISSION AHEAD: BEND NOT BREAK
CHANGE FROM WITHIN
DIGITAL-BORN ALTERNATIVES
BUT WHAT CAN I DO?
GETTING POLITICAL
ONE DAY IN NOT SO DISTANT FUTURE
NOTES
REFERENCES
INDEX
END USER LICENSE AGREEMENT
List of Illustrations
Chapter 1
Figure 1.1 Democracy is globally in decline the last 15 years.
Figure 1.2 Public trust in US government remained very low during the past decade.
Figure 1.3 Americans trust tech companies more than their government.
Figure 1.4 Trust in governments correlates closely with how much people believe...
Figure 1.5 As of 2023, significantly fewer people think representative democracy...
Figure 1.6 Citizens suspect political favors are the norm.
Figure 1.7 Many democracies allow anonymous campaign donations.
Figure 1.8 Inequality in the United States rose fast since 1980s to historic peaks.
Figure 1.9 Bottom 80% earners’ share of income kept reducing since 1980s.
Figure 1.10 Inequality of wealth is similarly staggering.
Figure 1.11 Economists found that Americans would like much less (but some) ineq...
Figure 1.12 Today, like beginning of nineteenth century, most of Europeans’...
Figure 1.13 A representation of our four economic identities, and how they interact.
Chapter 2
Figure 2.1 Lean Startup: an iterative, data-driven cycle of innovation.
Figure 2.2 Federal legislative process in the United States.
Chapter 4
Figure 4.1 Visualization of a Social Impact Bond.
Figure 4.2 A transaction between a business and a consumer almost always has for...
Chapter 5
Figure 5.1 Cynefin framework provides orientation for the kind of decision mecha...
Figure 5.2 The advertising industry changed radically with digitalization.
Figure 5.3 Can we use markets to incentivize public goods instead of traditional...
Figure 5.4 Math can help us model and understand the nature.
Chapter 6
Figure 6.1 Merit Democracy in a bicycle.
Figure 6.2 Overview of the front wheel: the legislative process in Merit Democracy.
Figure 6.3 Prediction markets are already used to predict real world events, out...
Figure 6.4 Proposal development: First leg in legislative process.
Figure 6.5 Short summary on the legislation market.
Figure 6.6 The economy of citizenship credits in the legislative cycle.
Figure 6.7 Dynamics of liquid voting in Merit Democracy.
Figure 6.8 Short summary on liquid voting.
Figure 6.9 The back wheel of service delivery.
Figure 6.10 The need to account for externalities of products and services.
Figure 6.11 We need companies to account for their externalities – positiv...
Figure 6.12 Leveraging markets for impacts.
Figure 6.13 Short summary on impact markets.
Figure 6.14 An overview of select externalities related to transport industry.
Figure 6.15 Illustration of a hypothetical media impact market.
Figure 6.16 The handlebar in the Merit Democracy helps align us on our challenges.
Figure 6.17 The nature of who stands to benefit or lose from provision or absenc...
List of Tables
Chapter 4
Table 4.1 Largest 10 social impact bonds.
Table 4.2 Examples of goods and services with extra taxes in various countries.
Table 4.3 Examples of goods and services that are being supported by the government.
Guide
Cover
Table of Contents
Title Page
Copyright
Dedication
Introduction
Begin Reading
Notes
References
Index
End User License Agreement
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THE NEXT DEMOCRACY
REIMAGINING HOW WE GOVERN OURSELVES THROUGH THE POWER OF DATA AND MARKETS
ERDEM OVACIK
Copyright © 2025 by Erdem Ovacik. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Author Photo: Courtesy of the Author
To Robert and Julian who saw my passion for social change and inspired me to take the path off the beaten track.
And to Petra and dear friends who encouraged me to speak my mind even when I felt vulnerable and held me when the path felt too long.
Introduction
We are living through a turbulent age with democracy at a crossroads. On one hand, it struggles under the weight of growing global crises such as climate change, disinformation, mental health epidemics, and geopolitical tensions. On the other, the system itself seems increasingly ineffective in tackling these challenges. Public disillusionment with governance is spreading, sparking debates about the sustainability of democracy as we know it. Is the democratic model outdated, unable to manage our interconnected, complex world? Are authoritarian systems like China’s or even an AI-powered governance models the answer?1 Or can democracy find its necessary new forms to be the way we govern ourselves? The question around what kind of governance can deliver the kind of future we seek has not been more pressing in the last few centuries.
We seem to talk about various issues from the rise of populism, to climate inaction, biodiversity loss, economic inequality, and the mental health crisis as if they are unrelated. They are essentially the symptoms of the deeper issue: our public governance systems cannot deliver. Our democracies were designed in the nineteenth century and only slightly adapted in the twentieth, are simply not fit to solve twenty-first-century challenges.2
Politicians are incentivized to focus on short-term popularity, not long-term solutions. Transparency and accountability are often afterthoughts. We do not have a way of linking policies to the results they create, or mechanisms to follow through. The art of governance has turned into a spectacle, where narratives, often twisted or outright fabricated, matter more than facts. Adding to the dysfunction is the influence of money and media in politics. Major media outlets are politicized, and focus on click bait over truth in public discourse. Our representatives focus on securing re-election and respecting party lines, whilst dancing between narrow interest groups and the story that resonates with the public, instead of what is in essence in public interest.
This misalignment between governance and societal well-being is fracturing our social contract. And innovation in governance is virtually nonexistent.
This is the “metacrisis,” the common thread that lies beneath our environmental, social, and political crises. It is a crisis of democracy itself in failing to protect and serve the collective good. The democratic systems that once facilitated human progress now appear outdated, unable to generate the leadership and vision we desperately need.
In this book, I present Merit Democracy, a radically different framework to reimagine governance. Merit Democracy is not just about tweaking the existing system but proposing a comprehensive overhaul. It draws inspiration from the organizing principles of the data-driven marketplaces and innovative powers of tech companies, and merges them with the need for public service. It bridges the gap between private incentives and the public good to draw individuals in crafting legislation and companies in delivering public service. In Merit Democracy, citizens aren’t merely voters; they are active participants and are rewarded based on their contributions to society. Similarly, companies are not merely catering services to us as consumers, but also as citizens, and get compensated for their impacts. In Merit Democracy, data and markets become powerful tools for collective benefit.
The Pressure for Change
Time is running out in order for us to realize a new kind of public governance. Our social troubles show in various statistics. In the past three decades, inequality has reached unprecedented levels in the west. In the United States, the richest 1% now own as much national wealth as the bottom 92%. At the same time, homelessness tripled and adult depression and anxiety rates doubled to 10% and 20% of Americans, respectively. Half of Americans report feeling lonely, which is a worldwide trend despite the digital connectedness and material abundance some enjoy.
This system also trashed the environment like there is no tomorrow: Climate change is accelerating with latest Intergovernmental Panel on Climate Change trajectories showing a trend toward 2.2 to 3.5 Celsius warming by 2100 (IPCC, 2023). But let’s not get stuck in on the climate issue, as there are many others that are also more local. The United States lost about 75 million acres of forest in the past 35 years, an area equivalent to Poland, about 50% its insect and 30% of its bird populations, while plastic waste went up a whopping 20 times to 42 million tons a year. In our cities, we let cars take most of available public space, and deal with their noise and pollution as if they are a given. Not to mention nitrification of soil due to fertilizers in agriculture, or acidification of oceans.
Meanwhile, technological innovations continue to accelerate. We are entering an era of AI which is already enhancing human capabilities significantly. Many seem to expect tech innovations will fix our public governance issues. They can’t: Technology is an enabler; it accelerates the dynamics already at play. Social media can connect us with loved ones, while also making us lonely and insecure. AI can be our assistant to guide and solve problems for us, just as it can manipulate us. No, new technologies on their own cannot save us. They need governance; the incentive structures and regulatory frameworks to ensure their capacities are directed at solving our collective challenges, not adding to them.
Reimagining Democracy
The next democracy we create must be at least as strong in creating an economy for the public goods as the neoliberal system we created that focuses on the private. To do so, it must leverage the most powerful technologies, just as the companies it intends to regulate, do. More specifically, this book proposes experimenting with a set of ideas towards a completely new public governance structure:
Pricing and Measuring Public Goods
: Public goods like clean air, safe streets, and social trust are difficult to quantify but vital. In our future democracies, we can define these goods and measure them through metrics that citizens can directly engage with, creating a transparent framework for tracking progress.
A Marketplace For Legislations
: Laws and policies could be developed and evaluated through prediction markets, which we know do well in aggregating opinions and knowledge from commodity futures to sports games. Proposals with highest value would be presented for a (liquid) vote. Successful policies that yield measurable benefits would result in rewards for their creators, aligning personal motivations with the public good.
Aligning Companies’ Incentives with Public Outcomes
: Using data analysis, the impacts of products and services on public goods could be clearly linked to financial incentives. Companies would need to consider the societal and environmental consequences of their operations, as these would directly influence their profitability. This transforms companies’ focus from merely consumer value to social value, harnessing their innovative powers.
Data as Core Competence of the State
: State would generate, aggregate and process data, ensuring privacy, integrity, and security of it. When we trust our governments, we must also equip them with the most valuable asset of all, our data, just as we do with the leading tech companies.
Continuous Improvement
: Unlike our static, outdated political systems, our future democracies would be agile and iterative, constantly refining itself to deliver better outcomes. It would monitor its own performance and adapt as needed, embodying the principles of agile governance.
The power of markets lies in their efficiency and adaptability. Capitalism has demonstrated that markets are excellent at allocating resources for private goods, where consumer demand and producer supply are in a dynamic balance. Yet, when it comes to public goods, markets have failed us. Neoliberal capitalism has driven extraordinary wealth creation but did so at the cost of: social fragmentation, environmental degradation, and political instability.
Similarly, data-driven companies like Meta and Alphabet have mastered the art of prediction, using data to know us better than we know ourselves. Data is the power fueling tech companies, enabling faster innovation through experimentation. Yet, such data capabilities have not been a part of our legislative processes or public service.
Our next democracy needs to harness these powerful concepts, and redirect them at the service toward solving collective problems. The dysfunctional democracy we have is our heritage, but not our destiny. We can design democracy where markets and data can enable societal advancement.
A Call to Action
This book argues that the solution for a sustainable future isn’t in returning to some nostalgic past but lies in creating something radically new. We must design a governance system that rewards evidence-based decision-making, fosters long-term thinking, and aligns individual success with societal well-being.
We are at a crossroads: innovate or watch democracy further erode. Ideas behind what I call “Merit Democracy” could provide us with inspiration for necessary evolution. This book is a call for a democratic vision where governance is as responsive, transparent, and efficient as the companies and markets it needs to regulate. Where we are empowered not just to vote but to actively and transparently shape the future and be rewarded for it. Where our governance technology evolves constantly to meet new challenges.
The west, who traditionally has been the spearhead of democracy, might not be at the forefront of the new democracy. For various reasons, the United States and Europe might be simply too slow to act on this governance metacrisis. It may be other countries and cities where leaders dare to try new methods for democratic governance may well provide the hotbeds of the future of governance as the example of Taiwan shows us.
This is a journey of transformation, not incremental change. It may not happen overnight, but we need to make changing governance our main agenda, and learn by experimenting with various components of a promising future democracy.
Chapter OneEXODUS FROM POPULISM
It was 2006, and I was spending time around the campus of UC Berkeley, studying for my masters degree in public policy. I was having goosebumps almost on a daily basis as we delved into a new area of policy and read about social studies that are showing causal links between well-being and various social policies. This felt like real enlightenment, and I was very excited, for I didn’t know such knowledge even existed! Here were the people with the tools to collect and analyze data that would show the links between early childhood education and health, as an example, or the impact of access to affordable transport on earnings. It seemed like the world was possible to understand through science, one step at a time. I was thrilled by the wisdom.
Just about a year before that, I had been seeking such conversations on the dinner tables of McKinsey colleagues. I would question how our work would impact the industry and society, whether the project was in telecom, banking, construction, or energy. I was 23 when I started at McKinsey and brought with me a lot of idealism and ambition and thought I could be a part of fixing things, while enjoying lucrative social status. Yet, despite the fantastic learnings on analysis methods and structuring arguments, the sense of meaningful work evaporated one expensive dinner at a time, where the conversation went from the loyalty points one had on their Hilton Diamond card to what car they would get next year when promoted.
It was in ex-Secretary of Labor Robert Reich’s class on leadership and society, where we discussed how movements started and ended. The class was much about understanding leaders that brought about social change, and the dynamics surrounding them. Professor Reich had transferred recently from Harvard’s Kennedy School of Government to UC Berkeley’s Goldman School. Some months into his presence at Berkeley, which was when I had started the program, he noticed something odd: Goldman School’s motto was “speaking truth to power,” which he realized by definition was not in power. In contrast, Kennedy School prided itself on their motto of “preparing public leaders.”
Truth needs power, Professor Reich insisted. We live in Western democracies, where truth has lost its power in public space. The reason behind this is deeply rooted in the design of our system itself, and not the personal features of specific leaders. Lobbyism and spin doctoring are also not the deepest root causes. They’ve arrived as an outcome of the shortcomings of our governance system. The way forward to embrace the future is not going back to something we romanticize, but putting our forces to build something new, and, possibly, radically different, so long as it excites us and brings us together.
In my late second year at Berkeley, I was yet again venting to Adam, my friend, about my frustrations about how so many things needed to change in the United States. Sure enough UC campus was a beautiful place to be, despite its many homeless. The campus hill oversees the golden gate bridge, where the sun sets. Most days are sunny where I would run into people throwing frisbee on the streets, as they wouldn’t give in to the pressure of demands of grades. In the middle of the campus is the circle that marks the free speech movement in the 1960s, which is the root of many social movements that unfolded in the decades following: civil rights, anti-war, environmental protection, academic freedom, gay rights, feminism. In this space being curious is encouraged, the professors take their time, you can see them hang out between breaks or in cafés with students having debates of sorts. As I hit the hills for my regular runs through the oak and eucalyptus trees with their distinct smell, squirrels stop and look at me, just as I stop and look out to the bay when I get to the top.
Yet, a few miles away from Berkeley campus toward Oakland or Richmond, I would start to note the private trucks replacing the fuel-efficient and discrete Prius of Berkeley’s streets. The inescapable marks of crime and pollution enter the picture with fear and frustration on faces in the BART trains. Richmond has a brown suspended cloud over when the wind is light thanks to its coal plant, with pollution warnings forcing people driving through to close their windows. “But we do know better, why isn’t that happening?” I would refer to lack of bike lanes or a preventative public health system, complaining to Adam.
He challenged me to leave. “Why stay if you are so upset about things?” he said. Many of the studies we had gone through were actually related to northern Europe. And many of my friends were also from there. After a few nights of sleeping on it, I knew he was right. I didn’t feel it was my fight to fix America. I wanted to go somewhere where I would not get as frustrated with the status quo.
On the first day of my move to Copenhagen, Denmark, an October afternoon in 2007, I took a long walk. I was curious about the country I ended up moving to. And I immediately fell in love with what I saw. It was cargo bikes being ridden near the city center, with kids having blankets on them. I didn’t quite understand why so many people would be on the bikes at around 16:00. Was this a special day, I asked back in the office. It wasn’t. This was the rush hour in Copenhagen. In fact, it starts around 15:00 and is already over by 17:00. The people on the bikes seemed not to be the poor ones who couldn’t afford luxury cars. Quite the opposite; they seemed well-off and cultured. I knew I landed in a good place. And I’ve called Copenhagen home for the past 17 years.
Meanwhile, the time that has passed shows me that similar problems of populism are also present in Denmark. The truth doesn’t easily make its way into shaping policy, our mechanisms for public decisions, and for delivering public goods, becoming unforgivingly dysfunctional and outdated. Even with best intentions, and bright people working on them, I see Denmark, and the rest of Europe walking slowly down the slopes of populism, just like the United States, dividing into the political far right and far left. I am not going to leave anywhere now. There is a battle democracies have to fight.
For the first time in history, today’s 30-year-olds feel they are worse off than their parents. This is a trend in the democratic west, despite the explosive and exponential technological development in these past three decades. Scott Galloway, a business professor at NYU and celebrated entrepreneur, sees that there is less hope for the young to earn enough for owning a house and to secure their future financially (Galloway, 2024). It also puts pressure on the idea of finding meaningful work and making time for human connection. Uncertainty of one’s financial future, as it is very much coupled with one’s job, means the paycheck of work takes precedence over relationships.
We can’t blame that on democracy, you might say. It’s just how markets have behaved, housing became more expansive, while salaries didn’t go up the same rate. But that response would be missing the point that markets are nothing but a construct of our social contract as Prof Reich would correctly state. We can and must change its rules to fit our collective needs.
We define how many more housing permits are issued, which manages the supply of housing. We also manage how much we tax financial gains on housing, thus making it a more or less attractive investment object. In Denmark, where I lived the past 17 years, normal income is taxed up to 58% (for annual incomes exceeding $80k annually) to support delivery of public goods. Yet, income from gains in trading one’s house is – guess what – tax free, and most people here find wealth not through their income savings, but through the increases of their housing prices. This means there is more pressure on buying homes, which contributes to increasing housing prices. This makes real estate into objects of investment, and more difficult for new potential owners to enter the market.
When it comes to salary levels, it is a similar story. Our democracies define not only what the minimum income is, but also what kind of social security needs to be paid along with it, rules about vacation, job terminations, and social security. I have been on the side of running a business and know how costly it is for a business to provide vacations and other securities. A liberal argument usually goes along the lines of making markets free such that supply and demand for workers meet most naturally. Indeed, there is something that seems natural about this process. However, the rules of that liberal system itself are not so natural as the research shows how it impacts our societies. We must have a system where policies are changed regularly to tilt the balance of income and wealth to our collective benefit.
These are all problems related to our social contract. What is being questioned is not how we behave individually, but as a society. If we look at society as one entity, and personalize it, we could say it is engaged in self harm.
To be fair, governments used to work. Historically, they addressed many societal challenges rather successfully. For instance, they effectively tackled the smoking problem through effective regulations including bans and special taxes. The rates of smoking are thus now far below those of the 70s, when “markets were free” (UK Government, 2024). They managed to mitigate the impact of ozone-depleting substances (UNEP, 2021). They introduced safety regulations for air travel making it much safer. In the decades preceding, our governments led our societies out of all sorts of issues with back then new and enticing approaches: from setting limits to firms for possible environmental damages to administering licenses to drugs, creating K-12 public education, ensuring stability of financial institutions to protect public savings and many more.
So, our governments have been capable of solving our issues, back in the day, before the world became as complex as it has become. It was never a rosy picture, but the trend was a positive one. People had better lives and opportunities than the generations before them. My argument is that our governance technologies fell behind in relation to the sophistication of markets in the past 40 years, and they can no longer deal with the issues created in the modern economy from loneliness to biodiversity with the organization and governance technology they have.
Where and how did this change? Adam Tooze, a historian at the European Institute, has identified the neoliberal course that Western consensus has taken in the past 50 years as the one responsible for crises we face today (Tooze, 2021). They essentially denied any limits to markets in relation to ensuring a sustainable environment and society. Because for neoliberal thinkers, government interventions are simply seen as unnecessary. Former US Federal Reserve Chair Alan Greenspan had replied, when he was asked about his candidacy for president, that he didn’t see the point of politics because not public authorities but markets, according to him, set the course for society.
Nobel laureates Daron Acemoglu and James Robinson documented their work on elite capture of democracy (Acemoglu and Robinson, 2012), how the rich are influencing political parties and policy makers and controlling information. They explain how the elite can form coalitions with bureaucrats, offering them high salaries or job security, and create a more loyal class of bureaucrats than the general public, undermining the democratic system’s accountability (Acemoglu and Robinson, 2006). Lobbyism and election campaign financing served as a part of this elite capture. It is also not a secret that much of the media are owned by a handful of corporations and have coverage that favor corporate and elite agendas. In return, our institutions did not have fail-safe design against these developments. They did not manage to reform to prevent the trend accelerating.
In The Great Regression, famous contemporary philosopher and sociologist Zygmund Bauman tells us that neoliberal policies and economic globalization have dismantled traditional structures of community and solidarity (Geiselberger, 2017). As the bonds that once united people have weakened, societies have become more individualistic and competitive.
People are encouraged to see themselves as autonomous agents responsible for their own successes or failures, which exacerbates feelings of inadequacy and helplessness. They are asked to find refuge in consumerism, which falls short of overcoming feelings of isolation and vulnerability, fostering a climate of fear and mistrust. This worldview makes it difficult to build the kind of collective movements needed to push back against neoliberal policies and defend democratic norms.
Meanwhile, Bauman asserts that the economic insecurity created fertile ground for populist movements that exploit people’s fears. They gain traction by promising to restore a sense of security and order, presenting themselves as champions of “the people” against a corrupt elite. They offer unrealistic yet simple, emotionally resonant narratives that tap into voters’ fears and frustrations.
Populism, in Bauman’s view, is a symptom of deeper social and economic dysfunctions that must be addressed through thoughtful and comprehensive reforms instead of scapegoating marginalized groups. Reversing democratic decline is challenging due to a media environment driven by emotion and sensationalism instead of rational, evidence-based discussions. He calls for more participatory forms of democratic engagement, exploring opportunities that digital platforms can offer to empower us, the people.
The problem is that our democracies have stopped being effective or efficient tools to provide collective goods. More specifically, it is the institutions and processes we’ve built around our democratic governance structure that don’t deliver what we need from them. When it comes to democracy’s fight to defend collective benefit, our discussions are more about perception management than they are about solving problems.
We do not measure the various policies’ impact on our economies, and do not link compensation or power we give to politicians to the success they achieve in meeting our collective goals. We give them power and reward them for telling us stories we want to hear and speaking and looking like how we do. If we measured what kind of thinking we apply in our politics, in behavioral economics terms, I fear we would find that most of our policy making is driven by an emotional connection (system-11) to a story or policy instead of critical thinking and reasoning (system-2) in the words of behavioral economist, Daniel Kahnemann (Kahneman, 2011).
Let’s face it: our technology of democracy does not deliver and cannot respond to the complications we need it to respond to. For the past few decades now, it did not succeed in creating or maintaining a social and environmental balance that is sustainable. It increasingly falls short of producing outcomes that convincingly improve our nations’ and humanity’s chances of long term survival. That is because governments now need to deal with increasingly sophisticated businesses and technologies, and concentration of power. We are not able to regulate effectively, let alone handle the upcoming AI and biotechnology revolutions, or, the now decade old social media and business models based on click bait content, data gathering, and monetizing our addictive behavior at our cost (Bhargava and Velasquez, 2020).
Also, increasingly, our democratic institutions have lost their legitimacy.2 The Democracy Index, often considered the best measure of democratic integrity, has taken a global downturn in the recent decade.3 We live in a time where most prominent intellectuals question democracy’s capacity to be the most viable system to govern going forward. Many wish that we go back to the good old days, before governance became too complicated. We seem to lack visions to move on to new directions.
I believe what we need is a transformation of democracy that goes deep, does not settle with changes in the surface, and goes back to the simple idea: how can we best take collective decisions for our best interest?
Big changes often happen at a time when everything else seems impossible, i.e. when there is a “burning platform.” The United Nations was founded on the ashes of the Second World War. We now live in a time again where challenges pressing us are big enough that we can see our platform for governance is in dire need of change.
We shall not need a big war, or a bigger, unprecedented economic crisis or pandemic, or deeper ecological threats than those we already have or had. We shall not need more human suffering, people on drugs, on anti-depressants, in jails, or committing suicide in order to realize transformational change is needed.
The Growing Mistrust in Public Governance
There is increasing evidence that democracy is under threat. According to the Economist Intelligence Unit (EIU), over the past 13 years, all five key indicators except political participation have been eroded (Figure 1.1). Those include the electoral process and pluralism, functioning of government, political culture, and civil liberties. The report in 2022 reads that “trust in government has plummeted” and “people’s attachment to democracy is weakening.” But the attachment has been strong enough that we had “an upsurge of popular participation and protest.” Having been raised in Istanbul, Turkey, and being at Gezi protests in 2013, I can relate to the civic upsurge that in return results in not more but even fewer civic liberties.
Figure 1.1 Democracy is globally in decline the last 15 years.
Source: The Economist Intelligence Unit, Democracy Index 2023: Age of Conflict, 2024 / INDVSTRVS / https://indvstrvs.org/eiu-democracy-index-2023-age-of-conflict/, last accessed on 14 December 2024.
According to the EIU again, only 8% of the global population are now living under full democracies. While countries like Germany, Canada, Australia, the United Kingdom, and Japan remain full democracies, the United States, Italy, Portugal, and Poland are not considered full, but “flawed” democracies.
The erosion of democracy is happening mostly in the emerging economies, or global south, the BRICS moving the average down. But it is also the trend in North America (Figure 1.2), and in some European countries, especially in Eastern Europe. The EIU names various factors as to why democracy is in decline (Economist Intelligence, 2024):
Perception of corruption, and government’s inability to address societal challenges such as inequality, health, environment.
Polarization and feeling stuck in a gridlock.
Populists exploiting public dissatisfaction by presenting themselves as outsiders who challenge the “establishment.”
Rhetoric and threats that undermine democratic processes from free speech to elections.
Erosion of democratic norms, such as respect for the rule of law, checks and balances, and judicial independence.
Figure 1.2 Public trust in US government remained very low during the past decade.
Source: Trust in government: 1958-2015 / Pew Research Center / https://www.pewresearch.org/politics/2015/11/23/1-trust-in-government-1958-2015/, last accessed on 14 December 2024.
Trust in government is a key indicator of how democracy is doing. Unfortunately trust in government has been on a decline in the US and many other democracies. In the United States, less than 20% of the citizens trust “the federal government does what is right most of the time.” Further, various surveys show that people trust companies more than they do their governments. Also interestingly, the best performing companies are digital platforms, like Google, Amazon, and PayPal, who rank better than other companies and brands (Figure 1.3).
Figure 1.3 Americans trust tech companies more than their government.
Results of Morning Consult survey, in which 16,700 individuals were interviewed at the end of 2019.
Source: Nicole Lyn Pesce, 2020 / https://www.marketwatch.com/story/people-trust-amazon-and-google-more-than-the-police-or-the-government-2020-01-14, last accessed on 14 December 2024.
Throughout this book, I will be promoting a system that is transparent and enables data-driven decision-making. OECD’s analysis on use of evidence to drive public policy seems to help build trust in public institutions, where citizens understand the evidence behind decisions (Figure 1.4).
Figure 1.4 Trust in governments correlates closely with how much people believe governments use evidence in their decisions.
The Organisation for Economic Co-operation and Development (OECD), surveyed citizens on their beliefs for government decisions being based on evidence. The result showed a strong correlation: when citizens believe governments make decisions based on evidence, they trust them more.
Source: OECD Survey on Drivers of Trust in Public Institutions – 2024 Results / Organisation for Economic Co-operation and Development / https://www.oecd.org/en/publications/oecd-survey-on-drivers-of-trust-in-public-institutions-2024-results_9a20554b-en.html, last accessed on 14 December 2024.
Why can governments not reduce this decline in trust and democracy? The PEW institute has been reporting on government trust on a yearly basis since 1955. One reason for this decline in trust could be that many government structures are not adapting or reforming quickly enough to meet modern challenges. As I will explain in Chapter 3, our governments made a lot of progress up until the 1970s in the United States, and 1990s in Europe. Nevertheless, thereafter, the act of state building and innovating government has stalled. The government reform was to get out of the way of business as much as possible. The neoliberal philosophy led by economists like Friedman argued successfully that the government was ineffective in its ways to achieve results and progress. He famously said, “The government solution to a problem is usually as bad as the problem itself.”
We started expecting changes from the private sector. The government lost its role as an agenda setter, and instead assumed the role of maintaining the status quo. It only stepped forward when its action was obviously required. The 2008 financial crisis, however, highlighted the limitations of the free-market approach, with governments stepping in to stabilize economies through large-scale interventions. This was a massive intervention, where the US government alone allocated $700bn to stabilize financial institutions, and another $800bn to stimulate the economy. So much for Milton Friedman’s free market.
In the 15 years that followed, other noteworthy government intervention was again necessitated by a crisis, namely the COVID-19 pandemic. The pandemic proved the importance of wide-reaching, coordinated efforts, and the ability to govern. Government interventions during crises like the COVID-19 pandemic extended beyond health measures, also encompassing economic support, such as financial relief for businesses and individuals. Government borrowing increased: the United States, the EU, and Japan all had large-scale programs to provide financial support to citizens and businesses. The US federal government alone spent $5 trillion in various stimulus and relief packages to keep the economy going.
Yet, these interventions were, in their nature, not focused on reforming markets or our social contract, but maintaining the status quo. They did not change the challenging long-term trends of increasing inequality, or other social and environmental pressures. We did not see new regulations coming into action, or the way regulations were imposed happen any better, or any significant means providing citizens with more agency. Many people remain concerned about the future, reflecting widespread anxieties about economic stability, inequality, and the efficacy of government action.
In the meantime, shortcomings of current democratic governance practices become more apparent. Thanks to digital technologies, our experience of how the world could work changes. With the introduction of social media and now recently AI in our daily lives, the way we consume and seek information is very different from 20 years ago. The shortcomings of the democratic decision process, whether its quality, lack of transparency, engagement or pace, become more apparent (Figure 1.5).
Figure 1.5 As of 2023, significantly fewer people think representative democracy is the way to govern their countries compared to 2017.
Source: Richard Wike, et al., 2024 / Pew Research Center / https://www.pewresearch.org/global/2024/02/28/representative-democracy-remains-a-popular-ideal-but-people-around-the-world-are-critical-of-how-its-working/, last accessed on 14 December 2024.
There is a trend among tech entrepreneurs in Silicon Valley – buying land in New Zealand – to seek refuge in a system that is doing better. Others are looking to move to northern Europe, where things seem stable.
Surely, there are many pockets of public trust and prosperity where one can ignore the bigger trends. Copenhagen, where I live, is one of them. For me, bicycles have become an important symbol of what I think is a good life. In this so-called cycling capital, about half of trips of Copenhagen residents happen on a bike. And I came to see that one could meet powerful people in Copenhagen on their bikes. The mayor of Copenhagen would be on his bike. Ministers are on their bikes. Just a month ago, I saw the world-renowned vice-commissioner of European Union, Margrethe Vestager, on her bike.
This nearly six million people nation has been shaped by grassroots movement toward democracy through the nineteenth century, a high level of trust in one another, and low power distance. The social trust levels in Denmark and northern Europe are among the highest in the world. One of the indicators to measure it is the wallet test. Researchers have dropped wallets in public spaces and observe the return rates. Denmark is one of the top scorers, with +80% being reported back. That’s against about 50% in the United States, and about 30% in Turkey (Cohn et al., 2019).
Denmark surely has some of the ingredients to be a strong democracy, and the state of democracy in many aspects is in better shape than other Western states. Denmark has even been subject to democratic debate between Bernie Sanders and Hillary Clinton, quite famously in 2016, where the two debated how the United States could become more like Denmark. And what lessons to learn from this state, which also has been repetitively selected in the past decade as one of the happiest nations in the world. The country has a high amount of GDP in government spending at 48% estimated for 2024, which is in line with many Western European nations (Statista, 2024), whereas the United States spends about 35% of its GDP on government expenditure. And its cultural heritage drives a low hierarchy where people feel their agency. Denmark has one of the lowest in the world, according to Hofstede’s measure (Clearly Cultural, n.d.).
But things aren’t as good for Denmark as it may seem. The trust in politicians has been in decline (Wang, 2023). While +60% of Danes trusted the government in the first decade of the twenty-first century, now less than 40% do so. The decline in trust in government is paralleled by the increasing income inequality in the country. It had one of the lowest income inequalities in the world with a Gini below 25% in 2000s, and exceeded 30% as of 2021. A report by Oxfam shows that from 2010 until 2020, the income for the bottom 40% in Denmark grew by 2% per year in comparison 13% for the top 10%. This means that the top 10%’s earnings have increased 200% in 10 years, while the bottom 40%’s earnings have increased only 20%.
No part of the democratic world is immune to the challenges lying ahead. We live in an interconnected world, not only by trade, but also our political and economic culture. In many ways, European institutions have been influenced by the United States’ free-market approach and have not produced other bold alternatives. These are challenging times for Denmark with the rise of populism, and deteriorating public trust, among other national assets, such as the environment, mental health, and even its cycling rate.
The erosion of democracy is a result of wide-ranging trends that undermine our capacity to govern. It is not only a matter observed in BRICS, or the United States or Europe. It is observed in all modern democracies; we are no longer believers that governments can deal with the challenges of our times as they are. If we do not act, things are going to keep getting worse, before they get any better.
Moving away from home to another, more promising land and system could be a solution for a while. Moving away from a difficult regime can provide much needed fresh air and hopes for the future. Ultimately though, the struggle for better governance will catch up in the new home unless we have figured out a better way to govern ourselves.
Everywhere there is a global fight to be fought for democracy. We need to create a vision of democracy that can deliver for all of us. In this interconnected media and culture environment, our biggest asset will be uniting around powerful new rhetoric that can fuel an awakening of the democratic ambition.
Before talking about the new visions, I will now dig deeper into the problems and set the stage.
