Sustainable policymaking at risk due to rising political polarization

Social inequality, climate change, global migration, the consequences of the worldwide economic and financial crisis of 2008 and international terrorism - the challenges facing the countries of the OECD and the EU have scarcely diminished over the last years. At the same time, however, opportunities to engage in long-term-oriented policy are compromised in many countries due to the advances being made by nationalist populism. The international community is drifting apart on issues of democracy quality and the rule of law. These are the key findings of our Sustainable Governance Indicators (SGI) 2017. From November 2015 to November 2016 the study assessed governance and reforms in all EU and OECD states on the basis of 136 indicators.

In the aggregate evaluation, the Scandinavian countries, led by Sweden, continue to achieve the best scores. Switzerland and Germany also fall into the top group. In contrast, the United States have deteriorated by three places, and continue to perform far below the average level (29th place). Greece again takes last place in the cross-country comparison, but for the first time, an improvement in policy outcomes is evident.

Economically, most OECD and EU countries were able to recover further from the effects of the economic and financial crisis of 2008. This is particularly true of the countries hit especially hard by crisis, where the structural economic reforms introduced in recent years are now yielding sustainable labor-market impact. Ireland demonstrates the strongest improvements in this regard, but in Greece too, the first hopeful signs since the outbreak of the crisis are evident.

However, from a cross-national perspective, there has been relatively little progress with regard to assuring long-term societal participation in the emerging economic upswing, aside from providing improved access to the labor market. For example, poverty reduction in Southern Europe is progressing only slowly. Child poverty rates in Southern Europe continue to sit clearly in the two-digit percentage range. Overall, most industrialized countries are treading water with regard to social policy. Featuring an already weakened sociopolitical order, countries such as Poland, the USA, Slovakia, Bulgaria, Romania and Hungary, whose political landscapes have recently been characterized by polarization and the rise of nationalist populism, registered still further deterioration or stagnation with regard to their sociopolitical performance. The gap between these countries and the top group encompassing the Northern European countries and Switzerland once again widened significantly.

The likelihood of reaching sustainable common solutions in critical problem areas such as the reduction of worldwide social inequality and the fight against climate change has again diminished. With respect to the common fight against climate change France and Germany have again expanded their activities, but the majority of developed countries have noticeably curbed their engagement in this area due to the pressures of the economic and financial crisis of 2008. Thus, the gap between those countries that engage strongly within the international framework and those that rely only on selective and uncoordinated engagement is further solidifying.

Differences with regard to realizing democratic procedures and standards have also grown significantly again in recent years within the OECD and EU. Very worrisome developments are evident in Poland, Hungary, Turkey and Mexico. "The fact that countries like Poland, Hungary, and Turkey are moving further away from the rest of the EU and OECD in terms of the quality of democracy places a heavy burden on the idea of European integration", notes Aart De Geus. In Hungary and Turkey, quite alarming trends have emerged concerning the respect accorded to rule-of-law standards. This relates particularly to core principles such as judicial independence, press freedom and the effective protection of minorities. In both countries, the media, societal groups and parliament no longer have the ability to exert sufficient societal control over the government.

Please find the complete study and all country reports here.