Dissatisfaction and frustration with democracy is widespread in many countries. This is understandable since the vast majority of people seem not to feel that they are actually in power or that they can take important decisions. Political leaders tell folks that they live in a democracy, but how much power do the people really have? The word democracy is composed of the Greek words Demos, the people, and Kratos, power. However, most so-called democracies are ruled by a small economic and political elite.

This is alarming because people stop believing in the concept of democracy, while the political bodies they are governed by are not very democratic. The problem is that many government institutions have resulted in a system that is more plutocratic or oligarchic, rather than democratic. The term democracy has been used so widely that political rulers love to use it, even when the people have no power at all.

Democracies differ tremendously according to how their primary institutions are built – often defined in the constitution: on what electoral system is parliament elected? What form of government is the country governed by, presidential or a parliamentary system? How much direct democratic decision-making power do the people have?

Institutions are the fundamental rules that govern our everyday lives more than we can possibly imagine. We all depend on them, and we cannot elude them. This is the social contract that we more or less willingly agree to in a democracy. Hence, it is surprising how little people generally know about these basic rules. The discussion of institutions and the knowledge of people about them is crucial for the development of our democracies.

In most countries a small political elite holds power with little leverage for people to interfere. The reason is that many institutions make it hard to contest power. There is no veto power for the citizens. An elite that is often wealthy compared to the rest of the population and influenced by corporate lobbying tries to hedge power. The question is then how can we break down elite political power and distribute it more widely among the population?

Reform of democratic institutions is extremely difficult unless the politicians themselves have an incentive to change the system – which they rarely have since they came to power on that same system. A political system thus can be locked into a specific constitutional corset for a very long time. Furthermore, constitutions are usually hard to change because the documents themselves define how the rules can be amended, often requiring very broad coalitions. The authors of such rules have an interest in making changing the rules really hard, providing veto powers to those in power, but not the population.

Paramount to inclusive, prosperous democratic countries is who is writing the rules of the game. Who is writing the laws? Who is defining how companies can operate, how much competition they face, how well workers are protected against exploitation, how easy it is to build a new company, or what are the regulations to get a permission to build a house? How these regulations are written is a consequence of who is holding power in our government institutions.

They are written by the people in parliament, our lawmakers, together with the executive government, and often approved or disapproved by a Supreme Court. Who is sitting in all these branches of government consequently affects whom the rules favor? Do they favor the rich or the poor, the big corporations or start-ups, the employees or the employers? Whose interests are represented in these institutions and whose interests are not represented?

So, what are the fundamental institutions in a democracy? There are at least three crucial institutions that break or concentrate political power. First, the electoral systems used to elect members of parliament or the congress. These rules determine who is sitting in our parliaments and consequently writing our laws. The fundamental difference is between majoritarian winner-take-all-systems and proportional representation (PR) systems. In short, winner-take-all systems are more likely to represent the wealthy elites and corporate interests, while proportional systems are more likely to resemble the whole of society and ease the entry and exit of political parties.

Simplified, while the U.K. and the U.S. use a majoritarian winner-take-all-system, for instance, most European countries use a more proportional system. So, if an electoral system favors wealthy people, and all lawmakers are millionaires, they are more likely to write laws that favor rich people. If lawmakers are funded by companies, they are more likely to write laws in the interest of business. If they are more like the average person, in contrast, they are more likely to write laws that help the average person to thrive. While going into the details of electoral systems goes way beyond this text, I invite you to listen to this and this episode of the Rules of the Game podcast where I am the host and producer.

A second fundamental institution is the form of government. The main difference is between presidential and parliamentary systems. A presidential system concentrates enormous power in one person, the president. In a parliamentary system the government is usually built through a coalition of parties and depends on the confidence of parliament. A majority in parliament can any time remove the government if dissatisfied. Then there are plenty of hybrid systems that use elements of both systems. While all systems have some advantages and disadvantages, parliamentary systems have demonstrated to be better at balancing political power and holding governments accountable throughout the term. Again going into detail goes beyond this text, but I invite interested folks to listen to two of my episodes on my podcast, with plenty of references to other contributions: here and here.

Finally, it is crucial whether the people have a veto power on constitutional amendments and laws. By veto power I mean direct democratic instruments that allow the citizens to take action and force the parliament and the government to change course. These are primarily ballot initiatives and referendums that guide and halt the political legislative process. An initiative works like a ‘steering wheel.’ It ‘guides’ the direction that laws have to take in the future typically upon the collection of a sufficient number of signatures to request the new law to qualify for the ballot. A referendum works like a ‘brake,’ meant to stop a law drafted by the legislative body from being implemented. Direct democracy is indeed a powerful tool, and employed sensibly, can be a useful check on the government. For interested readers I have produced several episodes related to direct democracy: here, here, here, and here.

Elite political power can be broken down. Bringing about that institutional change is hard though. It requires broad awareness in the population about these institutions to build up political pressure. Several episodes in my podcast provide a general overview over how to challenge elite political power and how power can be shared: here, here, and here.

I am looking forward to regularly contributing to Democracy Chronicles. Please feel free to reach out to me with feedback or suggestions for future contributions.