Let’s have better elections

A flawed election is better than no election. While in many countries that’s true, it should not be allowed to set the standard, as it does far too often.

Managing ballots and ensuring that they are all accounted for and properly tallied and accurately reported is analogous to accounting for all the transactions that occur in a cash business and ensuring that all the money is banked. It is logical that the controls that exist to make sure that cash doesn’t disappear should be found in the systems used for elections, but usually they aren’t.

That’s baffling.

In a business the primary controls are separation of duties, balancing the figures, and reconciling the data to other reliable figures. The person handling cash doesn’t handle goods. The person issuing the goods doesn’t handle the cash. The stocks are reconciled to the sales. Sales are reconciled to the money banked. The money banked is reconciled to the bank statements. Differences in the reconciliations precipitate investigation until they are satisfactorily resolved.

In a good business the systems report to management immediately when there is any attempt to circumvent the controls. And management makes sure that they know what’s going on.

In an election the ballots are the business’ equivalent of cash. The ballots used must balance with the number of voters authenticated against the polling lists. The number of voters that voted must balance to the number of voters authenticated.  A number of voters authenticated must balance to the independent tallies of voters that entered the polling station to those that left it, less the number of people who could not be authenticated. The number of votes counted must balance to the number of ballots cast less the number of spoiled ballots.

The people counting the number of voters are not the same as those who authenticate them to the polling lists. The people counting the votes are not the same people who issued the ballots to the voters.

At each stage each person responsible for a task should be reporting the figures to the electoral management body so that there is no opportunity for collusion. The central system can then perform the reconciliations automatically, and when something doesn’t balance, the system should notify management to initiate an immediate investigation.

In most elections it doesn’t happen like that.

It is up to observers, disenfranchised voters, and the losing candidates to detect and report irregularities. That’s not a system.

Usually it is only when the ballots are returned to the election management body that the reconciliations are done, if at all, sometimes days later.

When the announcement of the result has already been delayed by the logistical difficulties of getting the ballots back to the central electoral management body, the revelation that potential irregularities will further delay the outcome of the election raises suspicion and undermines the legitimacy of the result in the minds of the electorate.

The proposal that these basic controls should exist is frequently countered with the excuse that the infrastructure is not available and that developed country solutions are too expensive and won’t work in places where the electricity is unreliable and the Internet access is almost nonexistent.

And yet those are the countries that are leading the world using SMS to meet the public’s desperate need for banking services. That works fine! It can work for elections too.

Recently SMS technology was adopted for the Kenyan presidential election and it failed miserably. The lack of transparency as to what went wrong suggests that it was not the technology, but the implementation that was to blame.

Introducing these basic controls will, in the absence of massive collusion, eliminate ballot stuffing, manipulation of the results after capture, and many of the elemental errors that often contribute to lack of voter credibility.

Reading through the curricula of the political science degrees at the leading universities reveals that accounting is not a course that is offered. Perhaps that explains why the people advising election commissions don’t promote those controls that exist in well-run businesses.

That should change.

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Let the games begin

With the appointment of Paul Ryan as his running mate, Mitt Romney has confirmed his intention to focus on the state of America’s economy as a primary issue in the run up to the election. That’s a good thing.

In probability the Republican’s candidate will continue to blame the incumbent for the current state of affairs and promise that he will do much better. He’s already said as much.

What positive effect can a politician’s policies have on an economy?

Efficient government is key. And that’s where the disagreement will start – at least after the blame game’s ended.

Functional overlap
One issue that rarely gets raised is the level of duplication that exists across agencies – sometimes within agencies. For example there are 16 fiefs covering the intelligence responsibility. These agencies duplicate efforts, each trying to outdo the other, instead of sharing critical information. The details of the issues were set out in a Washington Post exposure following a two year investigation.

The challenge of fixing this is the responsibility of the Director of National Intelligence. This position has had a regular change of incumbents who, undermined by a lack of authority, struggle to fulfill the mandate.

Costly tax code
An unnecessarily complex tax code, with thousands of tax breaks that favor interest groups, exacerbates wealth inequality, and costs the country hundreds of billions in breaks and incentives, administrative overhead, and expert advice for tax payers.

Congress
The belief that congressional oversight provides democratic control over the President’s powers is a myth. When dominant party in the house is not the same as the President’s the country sinks into a morass of partisan bickering.

It would preferable for America to adopt a system of referenda, with proper controls and balances to avoid California’s mistakes, to enact significant legislative changes.

Direct involvement demands that electors understand the implications of important decisions. Rather than having partisan commentary, public debates between experts educates voters, and permits them to make decisions that are informed.

Dream on.

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Fooling all of the people

Jamie Dimon, the CEO of JPMorgan, took a different approach to the recent $2 billion trading loss the bank suffered. In the other cases: Barings (Nick Leeson), Société Générale (Jérôme Kerviel), UBS (Kweku Adoboli) it was blamed on the rogue trader. In JPMorgan’s case Dimon took responsibility. “We are sorry” he said. “We let a lot of people down.”

JPMorgan’s “fortress” balance sheet saw the bank through the 2008 crash and repay the $25 billion loan from the government in under a year.

Now things are a little different. Dimon is testifying to the US Senate Banking Committee, answering how and why the loss happened. How hard will he be grilled?

There is concern that he will get off lightly because the five most senior members of the Committee have a heavy reliance on campaign contributions from the politically connected New York bank.

The bank’s long political shadow hangs over the hearing, although several observers were skeptical that it will buy Dimon any favors in such a high-profile public setting.

“Contributions are useful, but they do not protect you when you have gotten in trouble in a high visibility way,” said Larry Sabato, director of the University of Virginia’s Center for Politics. “That description fits Dimon just now.”

The sub-text here is that if it weren’t such a high profile matter, JPMorgan would get special treatment because of the contributions.

There is a clear a conflict of interest, and members should have recused themselves. How will we know whether they have probed as deeply as they could. How do they, in their own minds, know that.

There is already a clue. A big question is whether the $2 billion figure covers the full extent of the losses. Dimon has successfully evaded the question, and the Senators have not pressed him. If he knows that the $2 billion is the total of the loss, there is no reason not to answer – so either he does not know – which is very bad, or he knows that it’s bigger and isn’t telling, which is worse.

The American voters have a right to something better.

More at:
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Ina Drew Out At JPMorgan After $2B Trading Loss, Dimon Says Firm Still ‘Very Strong’
Where is the Money? Eye on the Bailout

Democracy damaged

Both kinds of democracy have recently been badly damaged. Democracy, the one with the capital “D” includes human rights, rule of law, freedom of expression, good governance, and the right of every citizen to have a say in the way that the country is governed. The other democracy, the one with a small “d” is about the right of every citizen to have a say in the way the country is run – often summarised as “one man one vote”.

The crime scene is Egypt. The crime – the presidential election.

The people of Egypt fought for, and some died for Democracy. The system of democracy that the International Community proposed has produced a result that will disappoint almost everyone.

Let’s analyse the result so far. The first round did not produce an outright victor, one that had more than 50% of the votes cast. The two men who prevailed, and will face each other in the run-off scheduled to take place on the 16th and 17th June are polar opposites. Muhammad Morsi, of the Muslim Brotherhood, promises to impose Islamic sharia law and radically to reform government. His rival, Ahmed Shafiq, served as Mr Mubarak’s trusted last prime minister, stresses a swift end to what he calls “revolutionary chaos”. Morsi canvassed 25% of the vote, and Shafiq 24%. The turnout was 40%. That means that at best, the eventual winner will have 10% support of the eligible voters.

The 40% turnout, in a country where there is such a vested interest suggests either voter fatigue or that the choices available are not appealing. With the two candidates on opposite ends of the political spectrum, the next round is more likely to indicate a vote against one candidate rather than a vote for the other, leaving the ultimate winner with an unconvincing mandate.

The Economist reports that Mr Mubarak’s powerful intelligence chief, Omar Suleiman, ominously suggested before the election that in the event of a Brotherhood victory the army would simply take over. Just as ominously, disgruntled revolutionaries rumble that if Mr Shafiq were to win, they would again take to the streets.

Democracy in Egypt will be badly wounded, perhaps mortally.

The system of run-off elections provides a solution to deal with the lack of an outright winner in homogenous stable societies, not those in the midst of upheaval.

The benefits of Democracy have been tainted by the failings of an unsuitable system of democracy.

More at:
Egypt’s election Two reasons not to be cheerful