The International Journal
of Not-for-Profit Law

Volume 8, Issue 2, November 2005

By Susan Rose-Ackerman1

Democracy means more than elections, political party organizations, and the protection of individual rights. It also means that day-to-day policymaking is accountable to the public. Some claim that the only requirement for popular sovereignty is free and fair elections. But that is unrealistic. The chain from periodic elections to the details of public policy is very attenuated. Rather, as policy is made in the government and the bureaucracy, it is crucial that those making the decisions learn from individuals, firms, and other organizations what is at stake. The elected officials, their top-level appointees, and the higher civil service should make the ultimate decisions, but they need ongoing input from outside formal government structures.

Here is where the post-socialist transition process in Europe has lagged. These countries cannot attain full democracy unless the policy-making process becomes more accountable to citizens through transparent procedures that seek to incorporate public input. Of necessity, statutes are frequently vague and unclear and leave many difficult policy issues to the implementation stage. Given this, citizens and organized groups should be involved in that stage, with the government retaining the authority to issue general rules consistent with its statutory mandates.

Institutional design in emerging democracies involves a tricky balancing act. How can public bodies be responsive to the concerns of citizens and yet remain insulated from improper influence? How can they perform both as competent experts and as democratically responsible policy makers? I confront these questions in my book, From Elections to Democracy: Building Accountable Government in Hungary and Poland (Cambridge University Press, 2005). This article summarizes the main conclusions of my research. Hungary and Poland both have made the transition to electoral democracy but with relatively weak policy-making accountability. This aspect of state building has two parts. On the one hand, transitional democracies need to create accountable governments that can competently handle the tasks of the regulatory welfare state. On the other, they also need to confront the weaknesses of civil society as a source of advocacy and oversight.

I first outline the policy-making process in Hungary and Poland. Next I discuss the strengths and weaknesses of civil society organizations. The article concludes with a discussion of the benefits and risks of participatory processes, drawing on the rulemaking experience of the United States. Clearly, U.S. law and practice cannot be transferred uncritically. Nevertheless, fundamental features of U. S. administrative law – notice, openness to a wide range of opinions and expertise, transparent and well-justified decisions, and external oversight – seem basic principles that could guide public policy-making processes in all democratic governments.

Public Participation in Poland and Hungary

Policy making needs to incorporate public and interest group concerns without giving up the benefits of delegation to expert government ministries. This balance between public input and bureaucratic competence has been imperfectly achieved in Poland and Hungary. I summarize the situation in each country.

Poland:

• Under the Polish Constitution, the only route for public input at the national level is through the election of representatives to the Sejm (Parliament).
• Ministry regulations can be issued without giving notice, holding a public hearing, or providing reasons. Final regulations must, however, be published.
• Statutes and rules can be referred to the Constitutional Tribunal for a ruling on their constitutionality. A referral can only be made by a limited number of bodies; individuals only have access if they can argue that their rights have been violated.
• Although consultations do occur in practice, the law does not generally require that drafts be sent out for comments from political parties, associations, citizens’ groups, or experts.
• The Constitution gives citizens the right to obtain information from the state, and in 2001 the Sejm adopted an Act on Access to Public Information. However, its impact remains unclear, and the Act deals only with access to information, not access to process.
• “Tripartite processes” involving labor, management, and government exist. However, only about 20 percent of workers belong to a union, and that share is falling. Elsewhere, permanent institutions of stakeholders comment on draft normative acts and on petitions to improve regulations.
• The Constitution limits formal regulations and thus pushes public entities to use informal methods. As a result, some statutes are difficult to implement effectively because binding rules cannot be issued, and others may be administered through informal acts and case-by-case adjudications.

Hungary:

• The Constitution authorizes the issuance of government decrees so long as they do not conflict with statutes. The Constitutional Court held, in a case involving the regulation of abortion, that it is unconstitutional to regulate a fundamental right through an executive decree.
• Hungary has a Law on Normative Acts that permits “citizens—directly or through their representative bodies—to participate in the preparation and creation of legal regulations [i.e., normative acts] affecting their daily life.” Prior to promulgating a decree, “jurisdictional bodies, social organizations and interest representative organs have to be involved in the preparation of draft legal regulations which either affect the interests represented and protected by them or their social relations.” Unfortunately, the Act is mainly hortatory, but it does at least express an ideal of broad participation.
• A number of Hungarian laws require advisory councils. These are permanent bodies with shifting individual memberships that review government proposals and sometimes initiate studies on their own. The ministry or the government must consult with the council but is not subject to penalties for failing to do so. Government decision-makers are under no obligation to consult more broadly or to consider whether particular interests are inadequately represented on the councils.
• The Constitution includes a right for citizens to learn about and disseminate information of public interest. A 1992 act codified this right, and the Environmental Protection Act also contains a freedom of information provision. Both acts permit access to anyone; one need not show a personal or legal interest in obtaining the information. Civil society groups have tried to use requests for information to increase their influence. However, information is not always easily available and may depend upon personal connections.
• There is no legal requirement to publish proposed rules and statutes.
• The government elected in 2002 has made a few moves in the direction of openness led by the Ministry of Justice. The Ministry of Social, Health and Family Welfare has begun a process of broader consultation. It posts drafts on its website and sends them to a mailing list of about 600.

Conclusions:

In spite of some salient differences, the Polish and Hungarian governments face similar challenges in developing more accountable policymaking procedures. The difficulties they face fall into four categories: public knowledge, open processes, government justifications, and judicial review.

The governments do not routinely publicize draft regulations and statutes under consideration. Even when plans and drafts are made public, few laws require open-ended hearings or information gathering from the public. Instead, consultation is limited to pre-set advisory groups or a select group of insiders. Neither country requires written justifications for normative acts (regulations), and such justifications are seldom prepared.

The judiciary has not required much in the way of open and participatory policymaking inside government. In Hungary, access to the Constitutional Court is very broad, but challenges to the administrative rulemaking process are seldom successful. In Poland, access to the Constitutional Tribunal is more limited, but the Tribunal recently struck down the administration of a law for violating the Constitution. Poland has an administrative court system, but it deals with the administration of the law in individual cases and is unlikely to face a case where the procedures used to promulgate a general legal norm are at issue. In both countries, furthermore, the delays, costs, and the small chance of winning keep lawsuits by NGOs to a minimum.

Thus, the basic process of establishing legal norms and decrees inside the government risks being either an insular exercise carried out by ministers and their top assistants or a limited cooperative process that involves a few outsiders who either serve on advisory committees or who are associated with groups that enjoy special access to the government. These procedures may function well in particular cases, but they make it difficult for those who feel excluded from the process to do anything about it. Such individuals have no right to demand to be heard or to insist that the government defend its polices, short of a claim of unconstitutionality. The constitutional framework is not sufficient to manage the policymaking processes of either of these newly democratic states.

The Role of Private Groups

The Central European countries distinguish three types of organizations, other than political parties, that play a role in policymaking and implementation processes. These are “jurisdictional” organizations, “interest” groups, and “civil” organizations.

• Jurisdictional organizations or “self-governments” are mostly local and regional governments, but the category also includes other groups, such as university students and sometimes government agencies that will be affected by the policy in question.
• The term “interest groups” often refers simply to labor unions and employers’ associations that participate in the official consultation processes, which are sometimes referred to as “social dialogue.” However, it also can include other organized groups of economic interests. Professional “chambers” for such groups as lawyers and doctors and the Academy of Sciences mix these two categories. These organizations have been created by statute to regulate their respective professions. In general, they must be consulted if a draft law or regulation concerns their members.
• Civil organizations are nonprofit or civil society groups representing interests that are poorly institutionalized and cannot call on membership fees to cover their budgetary needs. The groups have policy goals that will affect a broad range of the population beyond their members. Examples are groups that focus on the environment, poverty, and human rights. Groups concerned with women, the disabled, the old, and disadvantaged minorities seek economic and social benefits for the groups they represent, but they also have broader goals and attract members who will not benefit personally.

The role of nonprofits as advocates and gadflies is in its infancy in Central Europe, as it is in other emerging democracies. My recent book includes case studies of two contrasting areas where private and quasi-private organizations are relatively well-established—environmental protection advocacy in Hungary and student groups in Poland.

Environmental Advocacy Organizations in Hungary:

Environmental activism in Hungary began at the end of the Socialist period, with small cores of activists able to mobilize large numbers of people to protest particular issues. These mobilizations continued into the democratic transition, but newer groups focus their efforts more on affecting policy using technical and policy arguments. Even the most active groups, however, depend on the energy of a few committed people, have scant funds, and rely on grants that may be canceled after a few years. Relations with public officials are sometimes rocky, but the groups’ access to the media and public sympathy for their efforts have helped keep them in operation and given them some influence. These nonprofits face three interlocked difficulties. These are problems of (1) financial and human capacity, (2) credibility, and (3) effective access to the policymaking process.

• Funding: Advocacy groups receive a large proportion of their funds from government and foreign grants. As foreign foundation support is phased out, these groups will become even more dependent on government support unless they aggressively begin to seek domestic private donations or develop eco-businesses to generate revenue. This may limit their role as advocates and gadflies.
• In seeking credibility, the groups follow two broad strategies. Some develop grassroots support and educate people about environmental problems. Access to the media is key and has been used creatively by several groups. Other groups gain credibility through providing expert opinions to public officials. Of course, expertise can help mobilize ordinary people as well, and a group’s expert opinions may be taken more seriously if it can point to media and public support.
• Access to key government officials is a function of legal and political practice and of the attitude of those in key government positions. Because it is relatively weak, the Environmental Ministry has sometimes welcomed the publicity for environmental issues that NGOs can generate. Other ministries are less receptive. If access to government is denied or if the decision is opposed to the group’s interests, one remedy is to go to the courts either to force greater openness or to challenge decisions after they are made. This is not often a fruitful approach if government laws and norms are at stake, but in the environmental area, legal challenges are sometimes worthwhile, especially to enforce the freedom of information requirements and to challenge individual projects. However, broad legal challenges to government rulemaking processes are seldom possible.

Student Groups in Poland:

Student and youth organizations in Poland present a complementary case. The sector includes both jurisdictional organizations, in the form of university self-governments, and civil organization. Some existing groups have also considered becoming interest groups, analogous to labor unions and professional chambers.

One group represents the reincarnation of the official student organization under communism. A second important group was formed in the 1980s to act as a counterweight to the official group and protest regime policies. Other groups are oriented toward professional development, often in alliance with the corresponding professional chambers. These associations interact with the official student self-governments, whose university-level leaders are elected and who claim to speak for the entire student community. The National Students’ Parliament includes representatives from the university parliaments. Several student groups are trying to create an alternative nationwide roundtable. These groups face issues of funding and of finding a credible and effective role to play.

• Funding tensions are similar to those facing the Hungarian environmental organizations. Government provides programmatic funds, and the self-governments distribute public scholarship funds and run dormitories and cafeterias under agreement with the universities. The self-governments are deeply entwined with the state and university administration, a fact that may blunt their ability to act as independent voices. The groups with political party allegiances obtain government financial support, at least when their supporters are in power. All groups rely on donations from private firms and foundations and on the sale of services.
• Student leaders struggle with the issues of how to reinvent their organizations, further their own careers, and interact with other types of organizations. This case is a particularly good example of the tendency of the state in Central Europe to gravitate toward formal, official bodies as the exclusive route for group influence. It illustrates the weaknesses of that strategy when the official organization lacks democratic legitimacy and becomes a source of conflict.

Thus, in a different country and in a very different policy area, we see some of the same puzzles and problems that face Hungarian environmental groups. How much should groups cooperate with official bodies? What are the costs and advantages of close affiliation or identification with particular political parties? How can funding levels be maintained without compromising independence? How should leaders balance the need for expertise against claims of broad popular support? If a group’s leaders have privileged inside access to policymakers and politicians, will they be a strong voice for more open and inclusive procedures? In both cases, the administrative process inside government encourages the development of a few “official” voices. In contrast, a process that is more open-ended would encourage the development of groups outside the existing hierarchies and generally excluded from formal advisory councils. This would put a greater burden on the government bureaucracy to manage public participation in government policy making, but on the positive side, it would avoid solidifying closed loops of consultation between government and certain privileged groups.

Developing Accountable Rulemaking Processes

The weakness of the policymaking process in Central Europe suggests a search for alternative models. One place to start is the United States administrative process. In the United States, legally binding rules (government norms or decrees with the force of law) are generally promulgated under the notice and comment rulemaking process required by the Administrative Procedure Act (APA). The APA, passed in 1946, sets out the essentials of a publicly accountable process. I focus on “notice and comment rulemaking,” where an agency gathers information free of the strictures of a judicialized process. This process requires that the preparation of rules with the force of law be announced in the Federal Register and include a hearing open to “interested persons.” Final rules must be accompanied by a “concise general statement of their basis and purpose.” Rules can be reviewed in court for conformity with APA procedures, as well as conformity with the authorizing statute and the Constitution. A rule can be struck down for being “arbitrary and capricious” or in some cases for being “unsupported by substantial evidence.”

There are many practical problems with the American rulemaking process, but in principle, it represents one approach to the problem of balancing expertise and bureaucratic rationality against popular concerns for openness and accountability. Critics argue that the most important problems with participation in rulemaking are delay, bias, irrelevance, displacement to other methods, and curbs on agency implementation. Case studies provide examples of all of these problems, but most appear largely to be the result of ill-designed and biased procedures, not of participation per se. In the positive cases, officials draft proposed rules in light of the forthcoming public participation processes. Even if they consult with a biased selection of interest groups before the public hearing process, officials must consider how their proposals will be greeted by the public and the media when they are publicly posted in the Federal Register and later, when they are subject to judicial review. Agency officials, knowing that their proposed rule will face public and interest group scrutiny, try to anticipate objections ex ante.

Open procedures cost time and money, so emerging democracies will need to make some compromises to avoid gridlock and to assure that processes are not just for show. The practical implementation of more open participatory procedures requires a realistic understanding of the tradeoffs involved. To improve policymaking accountability of the national government, a two-pronged strategy is needed – efforts, first, to support the creation and consolidation of independent nongovernmental organizations, and, second, to create a more open and accountable policymaking process inside government.

The first prong is to strengthen groups that operate independently of political parties and concentrate on a small set of policy issues – be they feminist causes, indigenous rights, environmental harms, working conditions, student concerns, or burdensome business regulation. Advocacy groups exist in most emerging democracies but they are often small, poorly funded, and lack professional staff. Furthermore, even organizations with ample funding may not be effective advocates if much of their funding comes from the state and if they administer government programs. The registration of nonprofit advocacy groups should be a simple and inexpensive process that concentrates on avoiding the fraudulent use of the nonprofit form for personal financial gain. In addition, governments may need to provide assistance to poorly organized and funded interests to help level the playing field in the administrative process. However, if governments subsidize nonprofit advocacy groups, support needs to be provided in a way that does not undermine the groups’ independence.

The second prong of a reform agenda includes the public posting of draft rules, making open-ended requests for comments, and giving reasons for decisions. The executive is ultimately responsible for the legal norms that it issues, but it must be willing to hear alternative viewpoints and to explain why it has selected a particular policy. Interested persons should be able to go to court to challenge executive decrees and normative acts that have legal force on the grounds that the process was not sufficiently open and inclusive or that the rule is inconsistent with the authorizing statute or the constitution. The executive should be open to comments from a broad range of interests and individuals. Managing these processes will require some creativity on the part of agencies, although new information technology makes broad participation feasible even in middle-income countries. Drafts can be posted on the internet, comments can be accepted by email, and agencies can facilitate public participation by developing web sites that are informative and easy to negotiate. Nevertheless, one cost of increased participation must be accepted – the time needed both to allow the outsiders to review drafts and to permit public officials to incorporate this feedback into the final rule.

Judicial review needs to support reforms inside the executive. Even if new statutes specify grounds for review, this might not be an effective form of oversight unless the courts are reorganized and judges retrained. To avoid interference by judges in the operation of bureaucracies, statutes need to specify the grounds for review, and these should be limited to procedural violations and clear inconsistencies between rules and statutes or the constitution.

Some claim that the focus should be on strengthening political parties, not overcoming the problems listed above. However, political parties are not a good substitute for independent civil society organizations. Too strong a move in transition countries to incorporate independent groups under political party labels could produce a system of rotating elected cartels that govern for limited periods without considering the interests of those who are currently associated with opposition parties or who are poorly represented by parliamentary blocs.

The problems of democratic consolidation in transitional countries are the problems of countries that have democratic structures, secure borders, no large-scale organized violence, and a functioning private sector. They are not different in kind from those facing democracies with much longer histories. The scale of the difficulties is larger for some issues, and the existing institutions in the public and the private sectors are fragile and untested, but none of these issues suggests an imminent breakdown of the state. This observation means that a new democracy can learn from experiences elsewhere. Its politicians and policymakers can engage in a productive dialogue with those in wealthier, more established democracies as they seeks ways to create more accountable government institutions that can garner popular support.

Notes

1 Susan Rose-Ackerman is the Henry R. Luce Professor of Law and Political Science, Yale University. For more detail on the material discussed here and for citations to the relevant literature, see her book From Elections to Democracy: Building Accountable Government in Hungary and Poland (Cambridge University Press, 2005). The book is part of the Collegium Budapest project Honesty and Trust: Theory and Experience in the Light of the Post-Socialist Transformation, co-organized by the author and János Kornai in 2001-2002. Other results of that larger project have been published in János Kornai and Susan Rose-Ackerman, Building a Trustworthy State in Post-Socialist Transition (Palgrave/MacMillan, 2004), and János Kornai, Bo Rothstein, and Susan Rose-Ackerman, Creating Social Trust in Post-Socialist Transition (Palgrave/MacMillan 2004).