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Institutions in times of crises. By Ricardo Lorenzetti

The governability crisis around the world has induced us to reflect upon the existent gap between the people and the institutions.

In the last 200 years, there has been legal advances in the acknowledgment of human rights and environmental rights, accompanied by a phenomenal technological transformation, which originated a great impact in several areas. Nowadays, it is undeniable that there are people who enjoy a life full of pleasures whereas others suffer from the lack of them. The excluded, the middle classes, the children, the adults, those who are discriminated want equality and they use their rights or manifest in the streets in order to achieve that equality.

In the last 200 years, there has been no fundamental changes in the way institutions are designed. Also, they lack of the celerity necessary to solve urgent problems.

Even if political or ideological matters were solved or consensus was reached when defining equality and development, this phenomenon still would lead to problems regarding the instrumentation of those institutions:

• Urgent necessities versus slow moving institutions
• Simple complaints versus complex public policies
• Plural and diverse societies that collide with state organizations thought for a more homogenous human behavior.

Organizing an economy or a society is complex because they are part of an interdependent system. And if that system is rigid, it accumulates tensions that latter on explode, which is what metaphorically happens when it is too hot or there are storms. It is necessary to incorporate flexibility in order to cope with the social, economic and environmental demands by improving adaptability.

There are lots of aspects that can be rechecked when talking about the theory of institutions, but we need to limit ourselves to just a few examples.


State policies

The incentive structure of electoral systems encourages the use and spread of actual benefits rather than costs because no one can win promising costs. Current technology has accelerated this process and it’s even more difficult to cope with everyday demands or whenever the events take place. Por eso surgen las declaraciones, las fotos, las escenografías, más que las transformaciones profundas.

The solution to the immense problems requires that we assume the current costs for future benefits and that is only possible if the electoral system and its particular stream of thought is not the only incentive. If that doesn’t occur, we can fall into authoritarism.

That is why it is mandatory for us to design institutional spaces where incentives to win an election are not so relevant.

One of those mechanisms is the creation through lawmaking of administration areas, where both the political party in power and the opposition participate with parliamentary representation, with stability and with decision making power and budgetary autonomy. That is possible in areas such as citizen safety or the provisional regime or sustainable development.

The Supreme Court in its ruling about the Riachuelo demanded the creation of an agency called ACUMAR, finally sanctioned by Congress, oriented to the previously mentioned mechanism. However, some key notes were missed that were essential for its efficacy.


Economic development

The economic development is embedded in the institutional design. The problem is that there are sectors that require a lot of innovation or voluptuous investments, but those sectors face difficulties within systems that are antique or unstable. That is why discussions fire off about the whole tributary, contractual or administrative legislation.

Many countries have created special systems for regions or specific economic areas. There are cities that have been designed for advanced technology thanks to laws, architecture, taxes, etc. In other countries with intense state intervention, governments have created specific parastatal organizations. China, the US, Israel or Vietnam are just a few examples.

The idea is to solve the problem while maintaining the current system, which tends to be rigid and centralized, but creating decentralized and flexible areas that are similar to islands in front of a continent. This allows us to do institutional experiments with limited risks and costs.

A federalist agreement is a useful mechanism to achieve this goal.


Institutions as a service

The Judiciary is one of the state’s three powers, but is also a service offered to the community in order to achieve social peace.

The legislation has focused on the creation of courts and procedures but it should be oriented to the citizens. More focused in the demands than the offer of the service.

For instance, people receive services in their neighborhoods, but in order to solve conflicts, they need to go downtown. Consequently, it is necessary to think about mobile courts, installed wherever there is conflict or in any other isolated region, using technology as a resource to enhance services.

It is also impossible to apply the same procedure created 200 years ago to every single conflict. Just as there are specific products and services adjusted to the consumer’s necessities, something similar should happen with judicial procedures. They could be much simpler in matters of consumption or retirements, which would lead to a reduction of number of files. There are collective processes for massive conflicts or even digital procedures where there are no complex proofs. There are conflicts where the State is the one who generates the conflict such as in retirement complaints, tax executions or health insurance services that can be avoided with alternative methods.

The idea is to reform institutions and not Constitutions. Those modifications are partial and make room for “institutional islands”, which aim to decentralize and diversify. By allowing the citizen to have an active role, the demands can be identified and properly oriented before they accumulate.

All in all, there are tons of experiences in the current world, tons of bibliography and, above all, an urgent necessity to rethink institutions in order to adapt them to the 21st century necessities.