Wed, Aug 23, 2006 - Page 8 News List

Institutional weaknesses fuel crisis

By Huang Cheng-yi 黃丞儀

In the debate over whether President Chen Shui-bian (陳水扁) should resign, one side has taken the moral high ground, while the other has responded that the president should finish his term based on the constitutional system and the rule of law. While it is difficult to set forth a concrete standard for moral appeals, advocating a resolution based on the institutional argument also has its blind spots.

For example, there is a limit to the institutional capacity of any system. If we always appeal to the system, isn't there a risk that it will break down when its capacity is reached? The simplest example is the public's distrust in the nation's constitutional democracy.

A presidential recall or impeachment can only be successful if it has the approval of two-thirds of the legislature. In the current legislative situation, it is generally believed that any attempt to do this would almost certainly be doomed to failure. This means that if one side insists on a resolution within the institution, when that path has already been blocked, the opposition is left with the option of at most merely paralyzing the legislature or continuing to try to uncover evidence of corruption by Chen.

In other words, the constitutional separation of powers -- that is, the doctrine of checks and balances -- becomes exhausted, and it is also difficult to see where and how to apply it.

As such, relying on the institutions may even expand the constitutional deadlock to other areas. When the deadlock reaches a certain level, the system itself will become the target of a serious challenge: In this situation, are there any benefits in continuing the operations of such a system?

From the perspective of an economic analysis of law, the nature of institutions is to reduce transaction costs. Simply put, transaction costs within the political arena can be read by the political and economic interests behind every bill. The Constitution's distribution of legislative, executive and judicial powers can thus be understood as a normative design for reducing transaction costs for political and economic interests.

Undeniably, complex political and economic interests lie behind the calls for Chen to resign. Originally, negotiations between such interests could be conducted within the institution of the Constitution. Unfortunately, currently, the operation of the constitutional system has made it impossible to reduce transaction costs, and may even be making those costs insurmountable, since one side refuses to communicate with the other. Political actors will therefore naturally seek another set of extralegal rules to resolve the conflict.

This tells us that the institution is not a cure-all, nor a protective shield that Chen's supporters can use to defend the president at will. Seeking refuge behind the institutional argument can only result in institutional failure. When this happens, the social cost of Chen's remaining in his post will be not only the funds his families and aides are suspected of having embezzled, but also drastically increased transaction costs caused by the ineffective operations of the constitutional system. To a certain degree, these costs can perhaps be seen as an acceptable investment in Taiwan's democratic experiment. But if the costs grow beyond what is acceptable, then Chen should seriously consider resigning to avoid a total breakdown of the constitutional democracy.

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