Competition enhances the quality of government

Published November 19th, 2000 - 02:00 GMT

The market economy and democracy are interlinked and act as integral elements to one another, said Dr Eberhard Rhein, senior advisor to the European Policy Center in Brussels, to an audience at the Jordan Press Foundation on Thursday.  


In a lecture entitled "Market economy and democracy in the process of European integration," Rhein explained the similarities between the two competitive systems and outlined their "logical corollary."  


"Competition enhances the quality of government," he said, and the competitive nature of the market economy has proven "the most efficient mechanism for the rational allocation of scarce resources."  


And where the market economy prevails, countries undergo transition towards democracy. New economic power centers develop outside of government and begin to "raise their voices and criticize acts of government which impede their business interests."  


Such is the case in most of the Mediterranean countries, Rhein said, including the likes of Jordan where this developmental process continues. "Each country will have to develop its own maturity," says Rhein, "you are supposed to have an efficient competition authority and free trade agreements with the US and EU will only increase competition," he said.  


While acknowledging the clash between traditional and modern worlds, Rhein sees Modernization as an unstoppable process. "When the market is free, the people will change the behavior of the marketplace," he added, noting that civil society is bound to develop itself.  

"Sooner or later you will push for change," he said.  


"Concentrate on getting free trade agreements in place with others," Rhein advised, pointing to Jordan's immediate neighbors like Egypt, Iraq, Syria and even Israel, and this will lead to eventual free trade with Europe.  


Rhein explained that Europeans attach such importance to democracy and human rights because democracy and the market economy have a direct bearing on the well being of societies. The Copenhagen Criteria of 1993 is an aptitude test set out by the European Union to screen countries for functioning democracy and market economy.  


"And that is why Turkey will have to wait a number of years before the EU will be ready to accept opening of negotiations," said Rhein. "They are not fully up to standards in terms of political culture and market economy," but he also acknowledged Turkish improvements in these areas.  


Rhein outlined that competition enhances the quality of government just as it does the free market, creating change and efficiency in both areas. Furthermore, democracy reduces opportunity for corruption and he discussed the correlation between the two.  


The market economy has a major bearing on government and good governance, Rhein explained. First, it prevents politicians from intervening in the process of resource allocation, those with proven track records make business decisions, and government only plays a reduced role in the market economy, but nevertheless an important one, of guaranteeing justice and fair play.  


"Europe has undergone a revolution in the last 30 years," he said, pointing to the break-up of state monopolies, which have allowed the dismantling of borders and the creation of a unified market. "It has reduced the power of politicians to meddle with economics."  


Finally, Rhein concluded, "democracy and the market economy offer the relatively best assurances of good governance and optimal well-being in a society, in terms of freedom, justice and material prosperity."  


The lecture was sponsored by the Jordan Press Foundation and the Amman office of the Freidrich Ebert Stiftung organization. — ( Jordan Times )  


By Owen Clegg

© 2000 Mena Report (

You may also like