We are probably all vaguely aware that the everyday contacts we have with authority in our supposedly democratic societies is with unelected bodies rather than with elected politicians, It is unelected bodies that help keep our financial savings safe, help determine our monthly utility bills, protect our health by deciding what medical treatments are effective and when a food product is past its ‘sell- by’ date, that keep public transport ‘safe’ and inspect our schools. They are with us when we are awake and when we are asleep. By contrast, fortunately for us, we can switch off from politics and politicians.
At the same time there is considerable confusion about how such bodies fit within the democratic organization of authority. When President Trump has a sleepless night and criticises the US Federal Reserve in a tweet, there are some who would agree that central banks have acquired too much power. since the 2008 financial crisis.
This blog looks at the main sources of confusion in thinking about how unelected bodies fit within a democratic framework.
Three sources of confusion
When we try to think about how unelected bodies such as central Banks, health and safety regulators, and public utility regulators fit within democratic structures of authority, we face three main sources of confusion.
Two organizing principles
When we think about the organization of politics in democracies we tend to think in terms of power flowing up from the people. This evokes an image of a ‘vertical’ organization of power. There are the people at the bottom, starting the process, and people at the top who are the elected politicians.
When we think about the organization of unelected bodies the image is rather different. It is about the advantages of specialization, distinguishing between tasks, and placing different types of expertise and knowledge into different boxes and compartments. These advantages are about the organization of tasks along a ‘horizontal’ axis.
The question then becomes how a vertical organization principle can be brought together with a principle about the benefits of a horizontal organization of functions.
Of course we can bring specialized expertise into the machinery of ministers, ministries, and central government bureaucracies. In this way we might hope to restore a vertical organization. But we recognize in today’s world that much of the necessary knowledge, information and expertise lies outside government.
We could also ask politicians to play more of a role. But who wishes to entrust elected politicians with the security of say the financial system and our lifetime savings? They have difficulty enough managing their own expense accounts and accounting for their own sources of income. President Trump's own business history hardly inspires confidence.
A single field of policy but many bodies in the delivery chain
The second source of complication in thinking about how unelected bodies fit within democracies is that within any single field of public policy there are likely to be several different bodies involved in the delivery of the policy to the public.
For example, the task of ensuring that the financial system delivers finance to businesses and households safely and efficiently, might be spread between a central bank, a securities regulator, a commodities trading regulator, a financial conduct regulator and a banking regulator.
Similarly, responsibility for the health sector might be shared between regulators of medicines and the medical professions, disease prevention bodies, health insurance supervisors and health inspectors, as well as bodies concerned with the interrelationship with public and private provision.
For many areas of public policy it makes sense to think in terms of multiple bodies and relationships that bring together elements of both vertical organization and horizontal organization.
We can visualize this in terms of ‘chains of intermediaries’ where, for the overall purpose of delivering a policy, bodies may be positioned along a chain, or dispersed and scattered around the chain. There are many different relationships along the chain.
Different constituencies to answer to
The third source of complication, common to these different bodies, irrespective of where they are positioned in the policy delivery chain, is that they are likely to answer to more than one audience or ‘stakeholder’.
An example can be given with the hypothetical case of a competition authority that decides to break up two or three dominant companies in a particular sector because it considers that there is ‘over-concentration’ that damages the consumer and public interest.
In this case the authority will have to give reasons to the companies targeted by its actions. Its actions may then have to be justified in front of the law. The authority may also have to justify its action to the government. It will also try to justify its action to consumers by, for example, pointing out the benefits of wider choice. It will want to justify its decision to its peer group of competition regulators because otherwise its reputation among its professional peers will be damaged. Last but not least, it will wish to justify its decision in front of those economists and other professionals who are involved in measuring market dominance and concentration and the possible effects on consumer welfare. It needs to demonstrate what is called ‘epistemic’ probity.
The need to speak to each of these different audiences is not simply a matter of taste, politeness and good relationships. If the soundness of the decisions of the body is rejected by professionals in the same field, by politicians, by the law and by consumers/citizens, then the body itself will also sooner or later be discredited and its own authority will be placed in question. A single contested decision may not be fatal. But a sequence will be. The legitimacy of both the decisions, and of the body making the decisions, are at stake.
When we think about the need to justify a decision to different audiences, we also need to think about the different ways in which the decision will be justified. The reasons given to peer groups and to specialists in competition theory will be reasons that meet the standards of the profession. The consumer/citizen is unlikely to be informed about the finer points of economic theory, nor do they need to be. They want to know how the decision effects themselves. At the same time, professional economists do not claim to be up to date with the procedural requirements of the law. The standards of what the law considers a justified decision are again different from the standards that a politician may apply in considering the political fallout. There is no single rationality involved.
A unifying concept?
It would be nice to think that there are democratic precepts that can simplify our grasp of this environment and provide some unifying principle that ties in with democratic principles.
We can start by reaching for concepts such as ‘accountability’ or ‘legitimacy’. These concepts are two sides of the same coin. Bodies that are not accountable lose their legitimacy. Bodies are not legitimate unless they are in some way accountable. We need therefore to find a way of expressing more precisely what we mean by accountability or legitimacy.
There are two leading contenders in trying to express accountability or legitimacy through a single, more precise concept. One revolves around a ‘first in, last out’ role of democratic government. The other revolves around the need for unelected bodies to give reasons for their actions. In this context there is a view that reason giving should conform to a single standard of what counts as reasonable.
The ‘first in, last out’ role of democratic governments
The idea of the ‘first in, last out’ role is that democratically elected governments provide an overarching control over the entire delivery chain and process.
They play what can be looked at as a ‘first in’ role because they establish the bodies and set their terms of reference. They play what is sometimes referred to as a ‘gatekeeper’ role.
They also play a ‘last out’ role. If disputes arise about the role of the body and the way it plays that role, then politicians can claim the ‘final say’. They can resolve the dispute by amending terms of reference, or by abolishing some bodies and by creating new ones.
What follows from this conception is that politicians should try to maintain control, and to minimize the chances of dispute, by the careful specification of functions of unelected bodies. They can also try to minimize the scope for downstream controversy by keeping terms of reference to largely technical and specialized functions.
The other way of trying to be more precise about the democratic norms that apply to unelected bodies is to emphasize their need to give publically stated reasons for their actions. Some democracy theorists suggest that these reasons must meet standards that the public recognizes as ‘good’ reasons in political debate.
What follows from this is the need for democracies to provide forums for debate and monitoring.
Answerability in democracies
The idea that there is a basis for the legitimacy and accountability of unelected authority to be built around the ‘first in, last out’ role of elected government, or around a recognizable standard of what is reasonable in a public forum, seems attractive from a normative perspective at first sight.
However, the fallacy common to both positions is that they do not recognize that the bodies in the delivery chain remain answerable to more than one audience and to more than one standard of what is reasonable. They do not just answer to politicians. They do not just answer to a political standard of what is reasonable.
We should not see this need to answer to more than one audience and to deploy more than one standard of what is reasonable as undermining democracies. On the contrary. We do not want to see politicians claim a role as the source of all authority in our societies, including the authority of the law and epistemic authority.
We can see the virtue of democracies in not trying to politicize all authority. We do not rest easy in our beds because the politicians we elected have ultimate authority in their hands. We rest easy precisely because they don’t.
Nor do we want democratic societies to pretend that there is only one standard of what is reasonable. We look to the law to apply its standards when called upon, and natural and social scientists to apply theirs when they are called upon. In our daily lives, and as voters, we want to apply our own imperfect judgments, in our own imperfect ways. Democracies recognize the virtues of this multiplicity.