Legal Commentary

Roger Myerson, a Nobel Laureate in economics, has proposed an interesting justification for federalism as a device to promote democratic accountability in new democracies. I am wondering if the Democratic Alliance's recent success in the West Cape elections in South Africa might provide a case study of the Myerson theory in action.

Here's a (perhaps inaccurately) over-simplified version of Myerson's theory (which is a rigorously formal theory as befits a Chicago economist and mathematician). Voters in regimes that have become newly democratic face a problem in assessing challengers to incumbent elected officials holding national office. Even if those officials are manifestly crooked, how is the voter supposed to determine whether the challenger is any more honest? After all, talk is cheap. But federalism can help by providing a sort of "minor league" for politicians in subnational government. Subnational politicians can credibly demonstrate their honesty by their performance in subnational office and then use this reputation to compete against national incumbents for national office. The incumbent must respond to the credible signal sent by the subnational official's track record by cleaning up his or her own act. Thus, federalism might improve democratic performance at all levels of government by reducing the barriers to entry for political competition.

Myerson himself applied his theory to Iraq -- in particular, the Provisional Authority's failure to hold local elections in June 2003, which Myerson believes may have deprived voters in Iraq of critical information with which to evaluate candidates for national office. But perhaps South Africa provides another example. The domination of the political system by the ANC in South Africa creates opportunity for corruption. Certainly the current ANC leader, Jacob Zuma, hardly exudes Mandela-like honesty. But how can any rival credibly signal to the voters that they are more honest? Enter federalism: The Democratic Alliance, a centrist party that forms the main opposition to the ANC, has under 20% of the seats in the National Assembly but won control of the Western Cape in the Spring of '09. On Myerson's theory, the DA's provincial triumph and their subsequent use of provincial power might force Zuma and the ANC to improve their performance.

But a lot depends on whether the South African Constitution protects provincial power with sufficient safeguards so that Helen Zille (the DA premier) can actually acquire a track record. In this sense, federalism is not protected by the national political process, as the old Wechsler-Choper theory maintained: Rather, the national political process is protected by federalism. (I should add that one of my students is writing about this issue of federalism and political competition in South Africa, so tips, citations, opinions, etc, from the readership would be gratefully welcomed by both him and me).