The Minister and a Robber

"On a cloudy day, in a cool and calm bank," said Wulandari, nearby volunteer and friend of the earth's circle, and the easiest celestial object to find in the twilight horizon, to begin a story.

"Everything goes as it should until a man—or more precisely a robber—walks up to another man in a suit and pulls out a rifle rifle with muzzle cut off. 'Give me your money, and all of you ... don't move!' the robber shouted. The man in the suit turns around, surprised. 'Wait, wait! You can’t do that, I am a minister!'

The robber replies, 'Oh, sorry. If so ...' while stripping the watch on the man's arm, the thick gold necklace hanging around his neck, the diamond encrusted ring on his finger, the thick wallet from his pants pocket, two expensive cell phones from his grasp, and an envelope containing a lot of money from under his suit, 'give my money back!'"

"As you all know," said Wulandari, "a minister is a politician who heads a ministry, making and implementing decisions on policies in conjunction with the other ministers. In some jurisdictions the head of government is also a minister and is designated the ‘prime minister’. The term minister comes from Middle English, deriving from the Old French word ministre, originally minister in Latin, meaning 'servant, attendant'. Ministers usually are member of a cabinet. A cabinet is a body of high-ranking state officials, typically consisting of the executive branch's top leaders. The function of a cabinet varies: in some countries, it is a collegiate decision-making body with collective responsibility, while in others it may function either as a purely advisory body or an assisting institution to a decision-making head of state or head of government. Cabinets are typically the body responsible for the day-to-day management of the government and response to sudden events, whereas the legislative and judicial branches work in a measured pace, in sessions according to lengthy procedures.

In English, the word 'cabinet' means an enclosed place with shelves for storing dishes, clothing, or supplies of some kind. So how in the world did the word 'cabinet' come to also mean the top of ficials who work for head of state or head of government? Sam Wellman, when discussing about how American Cabinet works, tells us that King Charles II, who ruled Britain from 1660 to 1685, brought the concept of a cabinet into use in the Englishspeaking world. A group called the Privy Council was supposed to advise British kings and queens. But by the time Charles II became king, the Privy Council had grown so large and unruly, it was an uproar of arguing voices. So Charles II selected a few leading members on the Privy Council for weekly meetings.

Although people in Britain spoke English, King Charles II—who had lived in France for eight years before gaining the British throne—dubbed his small, private group with the French word 'cabinet.' In French, cabinet means a small, private room. Only after Charles II had worked out an issue to his satisfaction with his cabinet did he meet with the full Privy Council. Naturally the full Privy Council soon had little influence with Charles II and with later British kings and queens. The cabinet wielded the real influence.

So, in America itself, says Wellman, the founders of the United States—while they were still colonists—were subjects of Britain’s King George III. The American colonies had been subject to British kings for many years before that. So most colonists not only spoke English but were very familiar with British law and customs. Even though the founders were determined enough to fight the Revolutionary War against Britain to be free of kings, they were still influenced by British customs. It was no surprise that in 1793, James Madison, who would some day become America’s fourth president, began using the word cabinet for the top few officials in the president’s executive branch of government. Madison also meant by the use of the word cabinet that meetings between the president of the United States and these officials were private. It would not be until 1907 that a law officially recognized a president’s group of top advisors by the word cabinet.

Wellman further revealed that Abraham Lincoln, before announcing his decision to abolish slavery, discussed the issue with his cabinet. Most presidents have used the combined knowledge and experience of their cabinet members as a tool to help guide their decisions. George Washington assembled some of the most prominent men in the United States to serve on his first cabinet. Thomas Jefferson served as Washington’s first secretary of state. He often disagreed with Washington and later resigned from the post.

That's in America, then how is the selection of cabinet members i.e. ministers, in another country?

In comical Naruto, in the land of Konohagakure—metaphorically speaking, recently, many volunteers who previously support the elected president—who supposedly likes to read comics, became members of his cabinet.

Keith Dowding and Patrick Dumont in their discussion about hiring and firing ministers in Europe, and follows up by discussion of hiring ministers around the world, in varieties of experiences with political regimes, say that in the twenty-first century, about two-thirds of democracies have directly elected presidents. The political history of a number of European countries in the twentieth century, features democratic breakdown, regime change or occupation by foreign forces followed by democratic transition.

In parliamentary democracies, they say, the government, through parliament, is the indirect agent of voters. In her role as chief executive, the prime minister (PM) is the agent of parliament and the principal of line ministers as her agents. The cabinet led by the PM is accountable to a majority within parliament and can be removed by such a majority at any time. How much control parliament has over the construction of the cabinet varies across systems. Who selects ministers also varies. However, the PM and her cabinet remain in office while they have the confidence of parliament through their party control. Each minister, including the PM, has an individual responsibility to report on and justify the activities within his departmental remit to the parliament as a whole. The government, as a whole, and the PM, in particular, have a responsibility to govern well and to maximize the probability that existing party members hold their seats (in relation to any other potential leader and government of that party) at the next general election. Individually ministers must retain the confidence of their backbenchers or be protected from their ire by the PM. The cabinet as the agent for its party in parliament, delivering policies that fit with party ideology and promise electoral success. The PM’s role is to construct and direct cabinet on behalf of her party, often in negotiation with the leaders of other parties within the ruling coalition. Each minister is directly an agent of the PM and through her indirectly an agent of their party in parliament.

Further complexities concern the role of political parties, the precise institutional relationships between parliament and the government and the role of institutional oversight in the form of a president or head of state who might play a part in selecting ministers. Where there is single-party government, ministers can often be thought of simply as agents of the government headed by a PM who is also their parliamentary party leader, though where party factions are important ministers might also need to show loyalty to those factions.

If ministers are leaders of party factions, then the PM might actually be beholden to certain ministers, just as they are to her. Where coalition governments form, such relationships are formalized further. In coalition governments PMs play (next to) no role in choosing other parties’ ministers and may in any case have to bargain over which minister and party (faction) will control which ministry. As a result, ministers of junior coalition partners find themselves agents of multiple principals who have distinct policy preferences: the PM (in her role as guardian of the coalition government) and their own party in parliament represented by its leader (either vice-PM or the leader of the party organization not sitting in cabinet). The PM must keep both the party she leads and coalition partners happy to ensure the stability of the cabinet. Thus, for PMs, coalitions open the door for greater agency loss, in terms of policy shifting. On the other hand, the likely consequences of these complexities can be anticipated by PMs, who might accordingly develop ambiguous attitudes to the success and failure of their agents in their roles as ministers. Whilst wanting a successful government as a whole, PMs might welcome the individual failures of major rivals, especially if they are from competing factions or parties.

In presidential systems, unlike parliamentary democracies, the executive does not depend on the legislative branch’s confidence. Having separate origins because citizens elect each at different times, neither power can remove the other. Cabinet ministers selected and appointed by the president are formally accountable to her and not to the legislature. Whilst they are expected to help the president secure parliamentary support and oversee implementation, they operate in different institutional contexts and face different constraints from their counterparts in parliamentary democracies. These variations derive from the different levels of constitutional authority and tools at the disposal of presidents.

Dowding and Dumont further give an example. Compared to Latin American presidents, the US president is rather weak. The US president also appears to be relatively constrained in non-legislative areas, such as powers of appointment, where presidential choices of cabinet secretaries are subject to Senate confirmation. Cabinet members in the US can even be said to respond to multiple principals, as their discretion is limited by Congress, through legislation, budgetary control and investigatory oversight. US presidents respond by appointing a number of additional advisors within the White House Office or the Executive Office at large, so that cabinet secretaries operate in a complex web of multiple and competing sets of principals and agents. Latin American presidents generally have more favourable constitutions but also strategically use their appointment powers to shape and reshape cabinets across varying structural and conjunctural circumstances. They may thus find it easier to get their policies implemented.

Semi-presidential systems combine many of these complexities with both a directly elected president and parliament involved in the formation and survival of cabinets. Principal–agent relationships can be straightforward when the president’s party controls parliament, but complexities arise when this is not the case. For instance, ministers of junior parties in a governing coalition which does not include the party of the president may well need to respond to three masters: their party leader, their PM and their president.

Principal–agent relations, appear much clearer in autocratic regimes, as one would expect ministerial agents to respond only to their ‘maker’, but even here the motivations behind recruitment reveal further allegiances. Cabinet size and composition in African countries, for instance, is largely determined by patronage. Especially in non-democratic systems characterized by ethnic diversity and greater resources, leaders appoint ministers from different ethnic groups to prevent coups from under-represented communities and to secure regime stability and personal power. Such cabinet ministers may also demonstrate loyalty to their ethnic ‘constituencies’.

In parliamentary democracies, moral hazard occurs where the minister takes risks that the PM does not approve of in the knowledge that the PM and cabinet will defend him. Moral hazard is a term first used in banking and insurance in the eighteenth century and reintroduced into the economics of risk by Kenneth Arrow in the 1960s. In Arrow’s sense, moral hazard can occur where the population is homogenous, but the act of making a contract itself creates perverse incentives. The very act of taking out insurance means that the insured will not act as carefully with regard to what has been insured. Thus, if one is insured against personal injury one might take greater risks. If one is insured against household burglary, one will spend less on door and window locks.

The doctrine of collective cabinet responsibility means that all ministers are collectively responsible for government policy. Any given minister has an individual incentive to promote a risky policy in the knowledge that if it succeeds he will gain the major part of the credit. However, if it fails, then it is the government as a whole that shares the blame. Other ministers might be concerned about the policy, but they are bound not to speak against it in public, and might have had little chance to speak against it in private. Of course, no policy (other perhaps than those put forward by big beasts) can be generated without the PM’s approval, but she might well be prepared to take risks, especially if the government is faring badly in the polls and needs a fillip before the election. Moral hazard therefore is directly promoted by the doctrine of collective cabinet responsibility.

A PM and a minister might conspire to take riskier policy decisions than the rest of the government, the party and the public would wish. If the government is polling poorly and the PM under threat, a minister pursuing a risky policy that might save the PM and enhance the minister’s reputation might be welcomed by the PM. However, the party might prefer less risky policies even without that particular leader. Here we have an analogy with the second problem that emerges in Arrow’s moral hazard account. In Arrow’s health insurance example, there is a conspiracy against the insurance company by the health-care professionals and the patient. Because it is the insurers, not the patient, who pay for the treatment, the patient will prefer the most expensive treatment even if it is only slightly advantageous. Of course, the doctor and the hospital would also sooner sell the most expensive treatment. Similarly with damaged property: if the householder were paying himself, he would sooner have the damaged item repaired at lower cost, but if the insurance company is paying, he can conspire with tradespeople to agree to have the item written off and replaced at higher cost. Moral hazard thus emerges for the higher principals–the party and the public–where risky decisions can benefit a minister and a PM more than their principals. Again, unless the cabinet moves against the PM (which involves a collective action problem because those who move first are often punished by their party for disloyalty and fail in their leadership bid, while if a party moves against the government, it might be punished by the electorate at the subsequent election) collective cabinet responsibility creates moral hazard.

In systems without collective cabinet responsibility such as US-style presidentialism, in which the cabinet is only an informal convention (and rarely assembles in full council), this source of moral hazard does not emerge. Directly elected presidents face policy shifting from cabinet secretaries because of their own expert views and from pressures from their department or Congress which votes on departmental appropriations. But such agent rent is not a moral hazard and is mitigated by the multiplicity of agents. Some delegations, especially in informal institutions, can be given if the principal can find just one reliable agent. The lack of collective responsibility in presidential systems also changes the relationship between the popularity of ministerial agents and their proximate principal, the president.

The availability of big spoils in autocracies with rich natural resources makes the differential of entering the state’s executive compared to remaining outside bigger and attracts the types of candidates to ministerial office that ideally a principal might prefer to avoid. Such adverse selection might not concern the autocrat so much. Indeed, autocrats might prefer corrupt officials as their very corruption

can help the autocrat control them. Moral hazard here resides in the conspiracy between a rightfully elected president (in electoral autocracies such as Nigeria) and her agents, as the distribution of payoffs benefits the dictator but is not in the public’s interests. Weak oversight, however, may prevent dictators from observing whether their agents are efficiently extracting rent to secure constituency support. Long-term government officials may threaten the dictator’s welfare. First, ministers may develop their own power bases to such an extent that they may be able to overthrow the leader, hence leaders often rotate their agents. Second, corruption levels might soar, causing internal and external pressures.

'Our writing is almost finished,' Thus quoted Soekarno's words in his work 'Nationalism, Islamism and Marxism' (1926), which contains ideas and invitations to intellectuals to unite against Western imperialism occurred in his time. There is something interesting about Herbert Feith's writing about the condition of Indonesia between 1945 and 1954. At that time, Feith said, 'It has been said that power in present-day Indonesia is primarily in the hands of intellectuals. The assertion is striking and it contains a great deal of the truth. The Indonesian intellectuals—we shall use the term in a specific form of its common Indonesian meaning, to refer to persons of Western university or senior secondary education—have been a central component of the country's political elite throughout the post-revolutionary period. This is clear from a "biographical investigation made by Soelaeman Soemardi of the 146 persons who had "been cabinet ministers between 1945 and 1954, the 234 persons who were members of parliament in 1954 and the 61 highest-level civil servants of that time. Soelaeman found that 83% of the cabinet ministers, 59% of the parliamentarians and 100% of the senior civil servants had obtained either a University or a senior high school education. He also found that 94% of the ministers (irrespective of their level of education), 91% of the parliamentarians and all of the civil servants had been educated in Western, as distinct from Islamic, schools and universities.

Indonesia's national revolution was led by such intellectuals, men who had appropriated much of Western liberalism and radicalism, and who, more than any other group, possessed the technical ability to take charge of a modern state, the necessary knowledge of Western languages and Western-type legal and administrative procedures. Many of these persons had been able to obtain their Western education because of the wealth or high social position of their families. But, as members of the revolutionary elite, their power and prestige depended much more on their educational attainments (and nationalist political record) than on the position of their parents, usually members of one of the small Indonesian business groups or one of the vestigial (and in most cases bureaucratized) aristocracies. The intellectuals had come to exercise power as an independent group, not, or only to a lesser extent, as spokesmen for the older groups from which their members had emerged.'"

"And our writing is near to finish," said Wulandari. "Before I go, let's review the story about the minister and the robber at the beginning of our talks tonight.

Finally, after seeing the incident, a teller says to her friend, 'I don't approve of political jokes.'

'Why not?' says her friend.

'I’ve seen too many of them get elected,' she concludes."

"And Allah knows best," said Wulandari as she inched away while singing,

It might seem like a crush

But it doesn't mean that I'm serious

'Cause to lose all my senses

That is just so typically me

Oh baby, baby

Oops, I did it again

I played with your heart, got lost in the game *)

Citations & References:
- Sam Wellman, The Cabinet (Your Government: How It Works), 2001, Chelsea House Publishers
- Keith Dowding and Patrick Dumont (ed.), The Selection of Ministers around the World: Hiring and Firing, 2015, Routledge
- Keith Dowding and Patrick Dumont (ed.), The Selection of Ministers in Europe: Hiring and Firing, 2009, Routledge
- Ir. Soekarno, Nasionalisme, Islamisme, dan Marxisme (Dari "Suluh Indonesia Muda," 1926), 1963, Jajasan Pembaruan.
- Herbert Feith, The Wilopo Cabinet 1952-1953: A Turning Point in Post-Revolutionary Indonesia, 2009, Equinox Publishing
*) "Oops!…I Did It Again" written by Martin Max & Rami Yacoub

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