Newsletter, January 2009

Contents this month

• Main article - Where is the Credit Crunch Consultation?
• Project news
• New Addition to the Dialogue by Design Team

Where is the Credit Crunch Consultation?

If you live in Germany and you happen to own a car over nine years old, your government has just increased its value by 2,500 euro (nearly £2,500) overnight. That is, if you decide to trade it in for a new car. Here in the UK, government offers a temporary 2.50% price reduction on all goods and services for which VAT used to be 17.5%. What would you prefer, as a consumer? And as a taxpayer - do you feel reassured that your government is tackling the credit crunch in an effective way?

These are fascinating times, as governments are forced to take unusually far-reaching measures after unusually little thought. The financial turmoil requires them to divert large amounts of public funds in order to reshape our economies and consequently our societies. But what is their guidance?

Random Solutions

To me many of the current 'solutions' governments propose feel rather random. The German government obviously wants to encourage people spending money, stimulating the economy, the car industry and - possibly - a cleaner environment, as new cars might be less polluting than old ones. The British government hopes that VAT reductions will make people spend more in general, again stimulating the economy (thus possibly even meeting expected VAT revenues). But what are their purposes, how do they justify their approaches? The same public money could have been used to make trains and buses cheaper in Germany or to increase social benefits in the UK. These of course are just examples: the point is that such considerations are hard to find.

Now that we are well underway in this collective effort to prevent further damage to our society, it is time for governments to assess which measures can be justified. Finding evidence would be one approach, but given the unprecedented nature of this crisis, a limited one. It would require another approach alongside: an extensive consultation process.

Negligible cost

"Wouldn't that be just the way to lose more time and money?" one might argue. I would respond, without hesitation, that it wouldn't. I believe there are strong grounds to consider spending some time and money on involving people. First of all, there are such amounts of public funds involved in crisis mitigation measures, so much more than in anything else citizens are consulted on, that it would only be normal for a consultation process to take place. The cost of even the most extensive process would still be negligible compared to the amounts being diverted to stabilise the banking sector. Also, there is time: why should we still rush into decisions four months after the breakthrough of the crisis; if things are given some more consideration they are likely to be more effective in the long term.

But even if time and money were available, one could object, the views of the lay public would hardly help solutions forward: people don't properly understand the financial system. Well, nor do governments, I would say, otherwise this credit crunch wouldn't have taken them off guard in such a manner. But, more importantly, this is not at all about the financial system; the decisions at stake are likely to concern, among others, social and environmental issues. As radical measures have become less unlikely these days (the VAT example shows they are already being applied) there is a whole range of possibilities to change societies for the better. This is where consulting the public is essential: people's views and values can lead the way to justifiable decisions.

Beyond lobbying

From governments' perspectives, I imagine there are two key advantages a deliberative process may hold. First of all, the process represents a real opportunity to get beyond the level of lobbying and individual short term interests. Participants will be encouraged to achieve mutual understanding and to prioritise common values they believe governments should respect in their decision-making. Second, decisions which are prepared in collaboration with people are easier to defend, not only because of the public's involvement itself but also because of the variety of views that have been considered during the process.

Most probably an extensive deliberative process will not deliver magic solutions to the crisis. Nor will it result in a unanimously supported approach. I am convinced however that it will add that vital bit that current approaches are missing: embedding of an approach in a shared value pattern, reassuring that a proposed solution takes the broader picture into account.

Remco van der Stoep