Wednesday, June 13, 2007

Why perfect political market is not always good ( part 1 of 2)

Could I find someone who really loves our politicians? You may reply “what a stupid question”. Surely, it is too naïve, to think that politicians advocate the interest of the people. I do believe there are good politicians but I do not trust, for sure, the devils in their hearts.

Recalling our politicians’ behaviors, I very often find myself so peevish. Recently several former candidates for the 2004 presidency election has been found involved in accepting non-budgetary fund from Ministry of Fisheries. In the last year, the members of parliament agreed to increase their salary. A couple months before, they endorsed a budget for laptop-project. What irritating the most is what they have gotten do not match with what they have done.

My friend indicates that this problem may come up due to high transaction cost and inefficiency in political market. To eliminate the cost and increase efficiency, it is necessary to bring competitive political market into the political system. Only by competitive means, our political system may produce an efficient political outcome.

It is true that current political institution is not efficient, particularly regarding the impact of the political outcome on the welfare of the people. However, calling for competitive political market does not seem to be the answer. What has happened actually is that our political system is too competitive. Multi-party system in parliament illustrates this situation and this is when our problem begins.

I argue that multi-party and presidential system is likely to increase the cost of lobby and uncertainty. Presidential system puts strong power on president to govern. However multi-party disperses the power on parliament. Power to govern, in the end, should be supported by voters which are represented by the parliament.

Here, the president will pursue policies which bring maximum gains (support from many parties) meanwhile parties put their support on some range of policies which the magnitude of supports varies in each policy.

Some say that the president Susilo Bambang Yudhoyono seems to be pigheaded by doing coalition when many political observers told him that he does not need to form a coalition. Why is he still doing coalition? Perhaps, by doing coalition, he thinks he can reduce uncertainty in the relationship between him and the parliament. Yet since the political parties avoid the risk of getting nothing, they spread out political support over available policies. Then no wonder does a political party stand in more than one side and a coalitional form in the parliament changes over time. This seems what SBY has missed