Dr. Massoud Nili

Conduct of governments in different countries is determined according to a deal between rulers and people. The logic of government formation in modern times is that governments provide the society with goods and services which cannot be supplied through market mechanism. They include public services, security, and foreign relations. Such services cannot be provided by economic corporations. Therefore, governments are known as institutions which sell those goods and services to the society within a set framework like any other economic corporation. However, since such goods cannot be monopolized by the private sector, they are provided by the state.

In this deal, governments receive the cost of public services through taxation.

Therefore, the government is an institution which provides services and exacts the costs like any other economic corporation. However, since such commodities cannot be owned by people, the government retrieves the costs through taxation.

On the other hand, since such services cannot be left to the private sector, it is more difficult to check them for quality. Quality control of such goods is much more difficult than those goods which we buy during everyday transactions. In other words, if a producer embarked on supply of a low quality product, the buyers may punish the producer by avoiding purchase of that commodity. In that case, the relevant economic corporation either goes bankrupt or will have to increase quality of its product. The government should also be held responsible for the quality of services it provides and that accountability is before people. Democracy is an institution which helps people to do their supervisory part.

If a government does not buy services at the expected quality, democracy would work as a corrective mechanism, which will either lead to peaceful transfer of power, or make the rulers mend their ways. However, the logic governing this relationship is two-sided. On the one side, the government exacts taxes to provide services, and on the other hand, people protect the value of resources which are at the disposal of the government through their votes and supervision over performance of the government.

People’s right within a democratic system stems from taxes which are paid to the government and anybody who pays taxes and receives services would compare those services with the time when they are not paying taxes.

If the comparison led to the conclusion that the security and general business atmosphere provided by the government ensures better welfare than when they are not paying taxes, in that case, tax payment would be economically feasible.

Therefore, there is a two-way relationship between tax payment and establishment of democracy. Now, if this framework is not taken as basis and the country in question is an oil-rich country, that relationship may take shape in another way. For an oil exporting country, where those resources are controlled by the state, the government has no need to people’s taxes in order to provide public services, because it is fed by oil revenues and the two-way relationship which exists in other countries would not be extant in such a country. In other words, people receive services without paying for them and those services are considered by the government as favor to people, like alms given to the poor. Under such circumstances, people should always be concerned about the time when the government may decide to cut those services.

In this way, the call for democracy would not be a public call and will simply be a concern for the intelligentsia. The intellectuals will then present their own interpretations of democracy and those interpretations will be never of import to the public.

It should be noted that nowhere in the world, the rulers will volunteer to be accountable to people. All over the world, rulers are willing to rule in a one-sided manner. What encourages governments to be accountable in other countries is the tax that they receive from the people and against which they have expectations. In the second group of countries, financial relationship between people and government is one-sided. People in those countries depend on a subsidized economic system which is introduced by the government.