Roger B. Myerson was awarded the Nobel Prize for Economics in 2007 for his contributions to "mechanism design theory."
His comment is adapted from "Imagine Society, Build Democracy," presented at the recent the recent World Congress of United Cities and Local Governments.
Successful democracy requires more than just elections. For democracy to be effective, voters must have a choice among qualified candidates with proven records of public service who have developed good reputations for exercising power responsibly in elected office.
When such trusted leadership is lacking, democracy is inevitably fragile. This essential supply of trusted democratic leadership can develop best in responsible institutions of local government, where successful local leaders can prove their qualifications to become strong competitive candidates for higher office. When locally elected leaders have full responsibility for both the successes and failures of their local administration, then those who succeed will enlarge the nation's vital supply of popularly trusted leaders.
We must recognize, however, that new competition from popular local leaders may often be against the vested interests of established incumbent national leaders. In a centralized state where governors and mayors are appointed by the national leader, these positions may be among the most valued rewards that a leader can offer to loyal supporters.
Then what leader could afford to disappoint his or her supporters by letting such valuable positions be given away by local voters instead? It is not surprising that national leaders have often chosen to retain centralized control of local government, even when political decentralization could strengthen their country's democratic system.
Look at the example of Egypt.
The importance of the Egyptian people's aspirations for more democratically accountable government is recognized throughout the world. If the transition to democracy there had started with local elections, many factions would have gotten opportunities to start building reputations for responsible democratic leadership in different areas.
But in a presidential election, only one candidate can win the prize of centralized national power. Like Egypt's old 1971 constitution, its recent 2012 constitution promised to transfer authority to locally elected councils, but only gradually, after a delay of some years that would allow current national leaders to retain power over local government.
Such centralization might have seemed convenient for the short-term interests of national leaders, but it left Egypt's new democracy perilously vulnerable to fears of another autocracy. Empowerment of trusted local leadership throughout the country could have done much to reduce such fears.
Excessive centralization can also harm economic development. People in poor communities can build and maintain roads and schools and other local public goods that are essential for economic development, but they can accomplish this only when their efforts are coordinated by local leaders whom they trust. Such trust can be expected only from leaders whose authority is based in local politics. Local officials whose positions depend on national political patronage are inevitably less concerned about developing trust among the residents of a small poor community.
Interactions between local politics and national politics can strengthen democracy at both levels. As I have observed, local democracy can strengthen national democratic competition when elected offices in municipal and provincial governments provide a ladder of democratic advancement that effective leaders can climb from local politics into national politics.
But conversely, national democracy can strengthen local democratic competition when national political parties provide alternatives to established local leaders. Local political bosses should know that if they lose popular support then they could face serious challengers from a rival national party.
For such mutually-reinforcing interactions between local politics and national politics, the institutional pillars for a strong democratic system should include both a multi-party national assembly and elected local councils with clear autonomous responsibilities.
A constitutional system with democratic local government can become politically stable once it is established. When governors and mayors are locally elected, they become local power brokers from whom national politicians must regularly seek support in their competition for national power, and so it then would be very costly for any national leader to threaten the constitutional powers of these elected local officials. Thus, a transition to a decentralized democratic system, once achieved, can be self-sustaining.