Scrutiny of Acts and Regulations Committee

Inquiry into Electronic Democracy

Discussion paper, October 2002

[Table of Contents]

2. Context

2.1 Democracy

The Concise Oxford Dictionary defines democracy as:

(A State having) government by all the people, direct or representative; form of society ignoring hereditary class distinctions and tolerating minority views.

The system of Parliament and Government in Victoria is a representative democracy . It is characterised by:

the periodic election of parliamentarians by popular vote to form a Parliament for enacting laws;
the formation of Government by parliamentarians (usually drawn from the largest political party or group of parties) to develop and implement policy and undertake the executive functions of the state; and
the rule of law and the recognition of property rights, with an independent judiciary to decide on questions of law.

In a representative democracy, citizens elect parliamentarians to make decisions on their behalf.
Representative democracy recognises a balance between the right of citizens to elect a government and the need for the day-to-day business of government to be undertaken by people with the capability and information to act on behalf of citizens. This contrasts with direct democracy, which involves direct participation in decision-making by citizens outside the election cycle.

Representative democracy has many variants and tends to be organic rather than mechanistic. The functioning of a representative democracy is complex and democratic processes are not independent of the society in which they occur. The system is also dynamic and constantly developing and evolving in parallel with changes in society brought about by factors including the discovery and application of new knowledge. This evolution is not orderly or planned.

A healthy and vibrant society rests on a balance between three growing stocks of capital that are used to generate wealth and create strong communities, tolerant of diversity yet cohesive. They underpin the consent to govern that provides the basis for effective government in a representative democracy. They also help define the legitimate role of government in society.

The three forms of capital are:

physical capital
- the physical infrastructure (including the natural environment) that is necessary for economic and social activity;
human capital
- the sum of skills and knowledge that people apply to economic and social endeavours, including information; and
social capital
- the social infrastructure in communities (the foundations for social interaction including democratic infrastructure such as institutions and processes); and
- the strength of social fabric (the complex web of relationships and interactions that provide the glue that holds communities together).

A well-functioning representative democracy has a healthy balance between the three elements represented in Figure 1:

active and informed participation by citizens;
a robust and diverse democratic fabric made up of groups, organisations and networks (e.g. coalitions of interest); and
responsive democratic institutions that provide effective leadership.

Figure 1 Representative Democracy

In this Discussion Paper, the term ‘democratic institutions’ is used to cover:

Parliament;
Government; and
the Judiciary.

The term ‘democratic entities’ is used to cover:

groups of citizens;
organisations (including businesses);
political parties; and
networks.

Democratic processes occur within as well as between the three elements. For instance, groups of citizens may come together to resolve an issue at a community level – strengthening the fabric of the community, of society as a whole and of democracy.

Without a balance between these elements, the legitimacy and effectiveness of democratic government is weakened.

Representative democracy has proven to be a robust and sustainable form of government in Victoria, Australia and internationally. But it should never be taken for granted.

An informed, actively participating, robust and diverse polity is a fundamental building block of our democracy. It underpins the legitimacy of Government and provides the broad consent to govern that is a key strength of our representative democracy. It also provides a critical check and balance, and helps guard against a ‘tyranny of the majority’.

Consent to govern is given both explicitly and implicitly.

Voting at elections is an obvious example of explicit consent. However, other activities also generate explicit consent including:

involvement by citizens in decision making that affects them;
accessing public information and scrutinizing government;
active involvement in political parties; and
active participation in groupings of citizens formed to represent particular view-points.

Implicit consent comes from the strength of the social fabric in society and involves general acceptance of modes of behaviour including:

acting within the law in the interests of society and in the absence of coercion;
tolerance of diversity of interest and viewpoints;
acceptance of a common good as well as personal interests; and
an understanding and acceptance that there are duties as well as rights of citizens.

Informed participation by citizens is necessary for both explicit and implicit consent and therefore is a foundation of democracy.

2.2 Electronic Technology

Rapid developments in networked, information and communications technology (electronic technology) are radically changing the way people, businesses and other organisations operate in their day-to-day activities. This development has been called the ‘information society’ because it involves:

a huge increase in affordable and practical access by individuals and organisations to information – in breadth, depth and timeliness; and
a major change in the way people and organisations can cost-effectively engage in interactive communication in a way that largely overcomes distance and time-constraints

The network is an essential feature of the information society. It consists of nodes (eg computer terminals) connected by computer and telecommunications infrastructure. It provides the framework for effort and the springboard for innovation arising from the use of electronic technology.

The network is continually growing, based largely around the Internet. Each time a new node is added, new interactions become possible.

The changes associated with the information society will be at least as far-reaching as any of the major technological innovations of the past, such as the introduction of railways, cars, electricity and the telephone. Those changes all had the same broad characteristics:

they were transformative, significantly disrupting established economic and social activities;
they became ubiquitous;
they became commoditised and costs fell steadily;
innovation exploded, leading to both new products and services that were directly connected to the change and also in areas which had no direct connection with it;
the full ramifications were consistently under-estimated, reaching far beyond the initial impact to change the way people viewed the world and, ultimately, to change society itself; and
they brought high external benefits to communities and society.

The Internet is already changing the means which people use to do their business. It is providing new channels for customers to access existing products, services and information. As well, it is also enabling new products, services and information to be made available.

In business the changes are even more dramatic. The Internet has quickly developed as a major means of communication between businesses and organisations. It is increasingly becoming the method that organisations use to conduct transactions with other organisations and individuals.
The changes brought about by the use of the Internet will be significant. In particular, it will cause significant changes in intermediary roles. Some will become obsolete and disappear altogether while others will need to adapt to survive. Many democratic entities fill intermediary roles.

Centricity

Another key feature of electronic technology is that it both drives and facilitates the centricity of individuals as consumers or citizens.

The technology makes it affordable and practical for individuals to have a central role in influencing the way organisations, businesses and governments provide information, products and services that are important to them. Individuals will increasingly be able to uniquely assemble or customise packages of information, products and services to meet their particular needs. This contrasts with the situation in the past where individuals have usually had to accept packages designed for the ‘average person’.

The technology also supports interactive dealings where dynamic feedback is provided about the changing needs and attitudes of individuals.

This shift in centricity will have a significant effect on the economy and society. It changes the balance of influence between suppliers of information, products and services, and individuals.

This is very important. Democracy is rooted in the popular consent of citizens, yet the perspective of democratic institutions rather than that of citizens usually dominates the processes of democracy outside the election cycle. Indeed, some argue that this domination has eroded informed participation by citizens.

The citizen-centricity facilitated by electronic technology provides an important opportunity to correct this imbalance.

A citizen-centric approach has three key advantages:

it delivers information and services that citizens want, not what democratic institutions determine. It does not force citizens to navigate the structure of democratic institutions to assemble the information or services they need;
it recognises and responds to people as individuals with unique needs and desires. It does not impose a lowest common denominator on the interaction between a citizen and democratic institutions. It allows the services or information provided and the quality of the service experience to suit the specific needs of the citizen; and
it captures feed-back from citizens about their changing needs and opinions.

As electronic technology hastens citizen-centricity, the drive for electronic democracy services and information will increasingly come from the citizen rather than from democratic institutions, as represented in Figure 2.

Figure 2 Citizen centricity and e-democracy

It must be recognised that the citizen-centricity facilitated by electronic technology can represent both an opportunity and an apparent threat to democratic institutions. The main opportunity is to strengthen informed participation. However, it also puts increased power and capability in the hands of citizens with significant implications for the operation of democratic institutions as will be discussed further below.

2.3 Electronic Democracy

Electronic democracy refers to the application of electronic technology to democratic processes. More narrowly, it is popularly applied to the use of the Internet as an aid to democracy.
An essential feature of electronic democracy is the use of electronic technology to:

better inform citizens and facilitate improved participation;
strengthen diverse and robust democratic entities; and
improve the responsiveness of democratic institutions and their ability to provide leadership.

A citizen-centric approach to electronic democracy allows for genuine interaction between the citizen, entities and democratic institutions because the technology supports mechanisms for:

citizens to better express their wishes about the services and information they need and the way in which they want them to be packaged;
democratic entities to better articulate and represent the views of different coalitions of interest; and
democratic institutions to better interact with citizens and entities, and respond to their needs in an affordable way.

However, it is very important to recognise that the technology can also generate effects that weaken the operation of representative democracy. The technology is transformative and potentially disruptive. It provides significant challenges as well as opportunities.

The literature on electronic democracy generally concentrates on the opportunities rather than the challenges. This focus is also represented in the Terms of Reference for the Inquiry. While emphasis is given to opportunities in this Discussion Paper, reference is also made to important challenges when these are identified in the analysis.

citizens – informed and participating

A key challenge for electronic democracy is to maximise the potential that electronic technology provides to better inform citizens and increase their participation in democratic processes.

There are strong reasons to act to improve access to information by citizens:

the cost of information discovery is high and it is hard to become informed;
people lack confidence in many secondary sources of information;
the information gatekeepers between a political issue and the citizen, including the traditional media and interest groups, exercise tight control over the passage of information which is difficult for a citizen to overcome;
people have different information needs, and want new ways to gain information that meet their specific circumstances and interests – they are subject to high levels of ‘information noise’; and
traditional broadcast and narrowcast techniques are not very effective ways to meet the different needs of individuals.

Electronic technology provides the potential for citizens to have much broader, deeper and more-timely access to relevant information about political issues and the operation of democratic institutions and processes. Even now, in the very early days of electronic democracy, citizens can access information about democratic processes to an extent inconceivable a few years ago, provided they have access to the Internet. The problem is now much less the availability of information but the capability and time necessary to utilise it.

Citizens also need ways to more effectively participate in democractic processes.

There are several dimensions to participation:

dealings between individual citizens and democratic institutions or democratic entities; and
interaction between citizens and between democratic entities.

As stressed above, democracy cannot be taken for granted and there should always be a focus on improving informed participation. Reasons to act to improve participation include:

an increased lack of trust in, and understanding of, democratic institutions and processes;
the balance of debate in consultation processes undertaken by democratic institutions is usually skewed against individual citizens; and
opportunities for effective two-way interaction are limited.

Electronic technology provides potential to improve participation by citizens. For instance, it provides additional ways to facilitate discourse with, and involvement by, citizens on policy issues. This is likely to increase the confidence citizens have in democratic institutions and strengthen the consent given to them.

democratic entities – diverse and robust

Electronic democracy also has an important role in strengthening democratic entities.
The functioning of democracy is constrained when democratic entities face:

high information costs;
high costs of association and communication;
difficulties in forming networks;
difficulties with maintaining relevance; and
barriers to participation in discourse.

Electronic technology can be used to assist entities to overcome some of these barriers. In particular, it:

makes it much easier for citizens and organisations to form together into democratic entities;
allows the formation of networks of entities to share experiences and pursue common objectives;
offers new tools for entities to obtain, analyse and disseminate information in pursuit of their goals; and
provides increased resilience to shocks such as the dislocation accompanying structural adjustment in the economy through improved marshalling of resources.

The diversity and robustness of our democratic entities is extremely valuable to our democracy and this can be enhanced by electronic technology.

However, as with the impact of the technology on participation by citizens, the characteristics of the technology can also generate unintended or adverse consequences for entities:

existing democratic entities will face greatly increased competition as new entities take advantage of the lower costs of formation and operation facilitated by electronic technology;
organisations that have operated as information gatekeepers such as the media and established interest groups will find their intermediary roles challenged or bypassed;
coalitions of interest will form and reform rapidly making it more difficult to identify a common or dominant voice; and
the smoothing effect on change arising from the stability of existing entities and institutions will diminish.

Of course, long-term changes to the nature, structure and influence of democratic entities have always been occurring. The influence of electronic technology only accentuates this change process.

democratic institutions – leading and responding

Electronic democracy provides an opportunity to support the ongoing processes of development, reform and renewal of key institutions that are essential to a robust democracy.

Electronic technology offers new opportunities to improve the effectiveness, relevance and standing of our democratic institutions. It can help to:

reduce the level of residual inequity in access to the information and services provided by institutions that citizens require to fully participate in democratic processes, and to be part of strong and tolerant communities;
provide new channels for the flow of information between citizens, democratic entities and democratic institutions, and increase the level of interaction embedded in those flows;
generate new opportunities for democratic institutions to explain the changes that are happening in the economy and society in order to generate the necessary consent for the decisions and actions that are required to secure Victoria’s position relative to competing societies;
create new opportunities for discourse and participation in the policy process;
secure personal communication and information with appropriate privacy safeguards while opening up the enormous information assets held by democratic institutions for economic and social development;
manage the diversity of issues of concern to citizens, from those affecting the economy and society as a whole through to those of interest to a local community, a family or an individual; and
improve the efficiency of institutions in service delivery and back office functions.

The impact of the technology will also challenge democratic institutions. They will need to cope with:

competition for political space as new entities contest with established institutions as the preferred venue for community and democratic processes, in the same way as the pattern of entities itself is becoming more disorderly;
difficulty in developing broad consensus on issues as increased levels of information allow the debate to be diverted to the minutiae rather than the overall direction;
the loss of a clear voice on issues from a small number of relatively stable interest groups as entities come and go;
an environment where misinformation can be transmitted broadly and quickly, and in advance of the checks and processes required of institutions – a consequence of a weakening of the editorial functions provided by existing information intermediaries;
information noise making it more difficult to pass clear messages through to citizens and the community;
perverse effects such as reduced participation by citizens in the face of information overload; and
pressure to invest in communication channels to cope with the volume and pace of information flows at the expense of other more valuable initiatives.

There isn’t a clear division between opportunities and challenges. From an institution–centric perspective, an aspect of electronic technology may be a problem to be ameliorated in the move toward electronic democracy. But from a citizen–centric viewpoint, the same issue may be a benefit to be promoted.

This is not just an issue of semantics. It will profoundly affect the pattern of investment that democratic institutions make in electronic democracy. For example, what should be the balance between establishing discussion forums to improve consultation on policy issues and investing in infrastructure such as software agents to assist citizens in managing their information needs?

Democratic institutions should act to inform, encourage and make possible democratic processes using electronic technology, even where they are not direct participants. They have the responsibility to invest in public infrastructure, including the infrastructure for democracy.

In doing this, institutions should recognise the central position of the citizen. They should not limit the use of the infrastructure to issues and approaches they prescribe.

Of course, democratic institutions face many challenges due to changes in society and from other pressures. Electronic technology is not a general panacea.

Electronic democracy requires that democratic institutions take a leading role in establishing the infrastructure and tools necessary for:

equitable access;
secure communication with appropriate privacy safeguards;
improved information channels; and
new opportunities for discourse and participation.

Democratic institutions should act to inform, encourage, make possible and, where appropriate, participate. However, in general they should recognise the importance of citizen-centricity and not prescribe issues and approaches.

Electronic technology can also significantly improve the efficient functioning of democratic institutions.
As an example, the structured use of electronic technology to pursue the traditional goals of government is called e-government. This is about the transformation of the services, operation and effectiveness of Government. It describes a way of operating rather than a deliverable in itself and therefore has real potential to deliver benefits across the major macro-policy goals of the Victorian Government other than Restoring Democracy (which is addressed in part by electronic democracy):

Better Services

provide the capability to identify and deliver services that meet a customer’s individual needs – real customer-centricity; and
enable the provision of packaged services that meet an individual’s needs and are provided through ‘joining up’ the efforts of different Government Departments.

Financial Responsibility

enable greater agility in responding to new policy issues and improve the capacity to meet emerging needs by providing a way to ‘join-up’ parts of Government activity without having to restructure Government or duplicate services; and
provide significant scope for greater efficiency through reforms that remove unnecessary duplication of activity and reduce the cost of service provision (i.e. the ‘back-office’ of Government).

Growing Victoria

strengthen Victoria’s leadership position in the knowledge economy and foster new economic activity;
provide continued impetus for Victoria to secure the benefits flowing from e-commerce and other online activity; and
enable new approaches to respond more effectively to emerging demands.

The Discussion Paper only deals with issues related to service delivery and government on-line processes where they may impact directly on issues of electronic democracy.