A deep look into our contemporaneous world tells us that the breakthroughs make our lives better, from health up to technology. But one aspect remains the same, politics. Pia Mancini – founder DemocracyOs – have an interesting quote about this (also interesting ted talk here)
We are 21st century citizens doing our best to interact with 19th century designed institutions that are based on an information technology of the 15th century.
Why hadn’t politics updated to a better and advanced standard? First of all, nowadays politics is a slow process, with few interactions with the environment, generating a disconnection between what is best for citizens. In a dumb analogy, start-ups adapt very quickly and generate new status quo among industries, the best of them, now are giants. The new competitors destabilize the big players, generating more value than leaders and established companies, leaving the citizen – customer in this case – in a better position, because with the same money potentially they can capture more value than before.
Why mix economics with politics? Will you ask? New laws and policies are created by government and members of parliament that supposedly represent the people. An interesting question is:
How can they make policies without tailoring policies for different groups? I can’t deny some policies will apply to all as equal, but in so many other topics, being able to measure the impact, in social policies, will increase the expected outcome and impact of tax revenue will be higher. This argument leads to another point, the incentives to manage someone else money are weak because in any case you still will be receiving the money, the effectiveness of the managed money decreased. Mutual funds are the best example, according to The Wall Street Journal article, 78% of mutual funds (US small cap) underperformed their correspondent benchmark or index, meaning they couldn’t beat the market but also a lower rates than a safe index, being a financial trap, because normally the administration fee from an index fund is a portion of a mutual fund.
Essentially politics don’t have a continuous process of improvement over time in terms of laws and policies, generating a process far slower, also having wrong incentives to not execute properly the policies, the only repercussion (good or bad) is the politician’s image – that already is very damaged globally -.
Technology is generating a radical change in how we interact, politics is not engaging at that level. According to GlobalScan study in the UK, 73% of people not agree the country is governed by the will of the people and also Brexit voters were 72% turnout. In my point of view, politicians think they have another status, rather than serve the citizens, as a moral differentiation, to try to illustrate this perspective there is this quote of Jeroen Dijsselbloem a Dutch politician.
As a minister, you shouldn’t imagine you know better than the technical experts in your ministry. In the end you’re there to apply the political stamp of approval.
Let’s say politicians truly want to help people and deliver the best outcome to citizens, they could use data for scaling the listening to their represented citizens and also improve current policies. Even if they take a step beyond them could involve citizens in the decision-making process, generating a stronger and deeper decision in the long run.