Vote on Jobs
Updated: Oct 14
Is the 4 -year election cycle in emerging markets more of a budget waste & execution disruption?
Let’s put aside for a moment the intricate and popularised thoughts on the importance of the voice of democracy, etc. At large, when we look at emerging markets behind democratic flags, quite often we find oligarchic structures of various forms at best.
In my work, I do capacity building for FDI, governance for investor relations and national programmes related to job creation. It takes many months to get a programme approved within a Cabinet/Parliament; then, whether advisors like me and my team join or not, many more months can go into contracting and procurement processes — we can even omit this part from our construct. Finally, almost a year after the programme was envisioned, its first practical steps are undertaken.
Let’s look at a four-year election cycle of an imaginary Country Di.
Year 0 — Country Di goes through an election cycle in summer, with the new Cabinet being appointed/formed later in the year. Because of slow appointments, inter-agency discrepancies, and a basic lack of organisation and time management, the new economic team misses the opportunity to include a new FDI / In-Country Value Creation programme in the next budget cycle.
Year 1 — Engagement with investors/potential partners takes place; however, for actual execution there is a lack of funding and/or capacity. Sometime around October, the team realises that here comes the new budget cycle. This time they start preparing the submission. Budget submitted.
Year 2 — Early the following year, as a result of Cabinet discussions, only a small fraction of the requested budget has been approved, making it almost impossible to execute a meaningful programme. Investors, partners and businesses are on standby, but nothing tangible is yet happening — for example, an appropriate PPP framework may first need to be put in place.
Year 3 — The team plans to submit another budget request, this time with better articulation of the business cases. Finally, the necessary provisions are granted, and meaningful and practical discussions with investors can actually take place.
Year 4 — It is an election/pre-election year. Few decision-makers are available or willing to take forward transformative programmes, as first their next-year positions — and the placement of the right people across agencies — have to be secured. Our PPP project is hanging in the air.
Year 4/5 — a new election cycle. This brings us back to Year 0. At best, if the same team remains in power, some institutional memory survives. At worst, new people arrive who feel obliged to bring in a new transformation programme, spend more time placing their people, reconsider existing priorities and once again go through the budget cycle.
And the clock starts again.
Elections are an important mechanism for bringing “fresh blood” into government. In theoretical construct, they are also an effective mechanism through which the citizenry can replace politicians and governments that are not delivering.
In practice, however — particularly when we speak about emerging markets with high debt-to-GDP ratios, dependence on external funders and investors, and internal inefficiencies in bureaucratic processes — the political cycle can make it extraordinarily difficult to execute and deliver meaningful, successful programmes for economic uplift, job creation and productive FDI.
The only “effective” programme in our hypothetical case might be giving away mineral rights to external parties. That could probably be done with relative ease. But this is certainly not what citizens mean when they ask for economic transformation, productive investment and jobs.
So perhaps the natural conclusion is not immediately that elections should become less frequent, but that we need to ask several uncomfortable questions:
Can we make bureaucratic and budgetary processes radically more effective?
Can we dramatically increase the capacity and skills of government servants and institutions?
Can strategic economic programmes be structurally protected from electoral discontinuity through multi-year budgets, stronger institutions and cross-government commitments?
And, finally, should we at least be willing to examine whether the duration of an electoral cycle itself is always aligned with the social and economic needs of a country?
Could there be circumstances in which a longer election cycle — perhaps seven or eight years — provides the continuity required for a serious economic reform programme, particularly where debt-to-GDP has crossed a critical threshold and an emerging economy urgently needs to make FDI “sticky”, build domestic productive capacity and create jobs for its citizens?
Or is the real problem not the length of the political cycle, but the inability of institutions to make national economic programmes survive it?
