Technologies of Liberal Democracy

Concepts in contemporary statecraft correspond to state argumentation, denoting the observed technologies of the liberal democracy (Rodrik, 1999).

(a) Convention Technologies, refer to procedures of participatory liberal democracy that is capable of delivering superior distributional outcomes; and

(b) Innovation Technology, whereby societal organisations harness institutions of conflict management that result in a 'double commitment technology'. Innovation technology effectively warns 'winners' of social conflict of limited gains (deterrence); and at the same time assures 'losers' that they will not be expropriated (safeguards).

Material Welfare

The modern social compact incorporates an idiosyncratic context for the market system. As a result, while institutions of democracy represent the political ideal, they also serve to supplement the attainment of more foundational aspirations for economic development, material welfare, and ideational freedom (economic liberalism).

Mobility of Capital

The ability of private funds to move across national boundaries in pursuit of higher returns. This mobility depends on the absence of currency restriction on the inflows and outflows of capital.

Complex Capitalism

The contemporary phenomenon of free trade in world markets characterised by the differential interests of factors of production: (a) labour (popular capitalism); (b) enterprise (alliance capitalism); and (c) capital (advanced capitalism). The government sector of the economy provides policy innovations, and general oversight to procure competitive markets.

(i) Popular Capitalism

Originally popularised by the Thatcher government, processes of wealth accumulation are deemed basic to household and private sector activity. Popular capitalism espouses economic emancipation whereby individuals acquire access to material welfare, home ownership, affluence, and a universe of financial and portfolio securities.

(ii) Alliance Capitalism (also known as Regulatory Capitalism)

The concept of Alliance Capitalism refers to role of government in crafting business and industry policy to sustain domesticated enterprises and to promote multinational enterprise activity. Governments may deploy a variety of taxation and incentivisation programs to foster and encourage formation of business enterprises.

(iii) Advanced Capitalism (also known as Disorganised Capitalism)

Advanced capitalism distinguishes post-industrial countries by measures of depth and intensity of integration of the capitalist model, and characteristically denotes those societies that have already attained the status of mature open-economies.

Policy Capability

Policy capability is exemplified by an 'extractive' capacity of state, referring to the ability to develop and implement effective fiscal policies. Effectiveness of policy is also deemed reliant on social cohesion between and among social and political institutions that is necessary to assure civil order and mitigation of moral hazards.

Credibility of Policy

Credibility of policy is a measure of the rationality of policy choices and the ability of sovereign states to galvanise the optimal outcome between national preferences and international rules, and refers to explicit market speculation about public integrity, plausibility and probity of policy making.

Empirical data by the OECD indicate that credibility of policy is also closely correlated to the standard of regulatory management systems (RMS) which are configured by a principal axis of institution and tool building capacity and a secondary components of stock oriented strategies (Jacobzone, 2010).