By miliux

Subject: Consensus driven Netherlands and its implication in both domestic and foreign policies.

The Netherlands had centuries of consensus-driven pragmatic method of governance in both domestic issues and foreign policies. This method of multi-level governance was in response to the weak state attempting to appease the nation to claim its legitimacy. The civil society has been the driving force in challenging the authority and function of the state. It is indeed that the state has never been autocratic for centuries since the Golden Age. Globalisation has had the significant influence in how decisions are processed, considering that the make-up of its economy relies on the doctrine of neo-mercantilism, which refers to high dependence on export as the source of nation-state’s economy. This paper will analyse the governance of The Netherlands discussing the history of post war planning, the polder model, consensus democracy, the role of religion and socialist ideals and the Dutch foreign policy.

History of Post-war Planning in Governance
In order to demonstrate how the Polder Model has been formed, it is essential to show how The Netherlands shaping its governance in the post-war period. On the aftermath of the War, the recovery of the Dutch economy was primarily generated by strong government discipline in all sectors of the economy while providing food assistance to those disadvantaged (Beaumont, 2003: 190). In 1947, the U.S Congress approved the 17 billion dollar Marshall Plan to assist in the European recovery effort while contain the spread of communism from the Soviets (Borghi, 2007: 87). By 1950s and 60s, the Dutch welfare state was constructed and extended (Borghi, 2007: 87). Various pillar sectors emerged in non-state actor’s method to manage without heavily relying on the state for direct intervention. Political parties were created to represent these pillared societies in the political sphere so that it maintains its own interest, or at least give chance for collective negotiation.

By the 1960s and 70s, it became the heyday of the rational top-down government planning. The state has turned into technocratic governance in which nationwide infrastructure projects were initiated to improve economic efficiency. The elites believed that planning was applicable to all facets of society and so the government responded with range of generous reforms dealing with housing health and welfare (Horst, 2001). The Dutch state, like the rest of Western Europe was dominated by legalistic thinking and policy-making (Horst, 2001). It was necessary that all non-state actors were to practice within the confines of the Dutch law voluntarily. Such strong central control by the government was surprising historically in The Netherlands as for centuries the state was relatively small and behaved like min-archaism by protecting the Dutch property and sovereignty and not intervene in already existing domestic norms (Horst, 2001).

The global oil crisis in the 1970s and early 80s became a catalyst in reforming the cumbersome welfare state (Woldendorp, 2005: 190). It was unsustainable for state to have profound influence in production through its fiscal policies. The oil crisis caused a global recession, and for The Netherlands which relies profoundly on global trade for state’s taxation revenue and domestic production. Unemployment escalated, economy stagnated and the government’s budget had escalating deficit (Woldendorp, 2005: 190).This economic situation was coined as the ‘Dutch disease’ (Karsten, 2008: 43).

In 1982, the coalition between Christian-Democrats and conservative Liberals lead by the Catholic Prime Minister Lubbers set their agenda in structurally reforming in how the state would intervene in the economy (Karsten, 2008: 42). Downsizing the public sector and upsizing the private sector were priorities. As a result, the welfare sector was almost decimated including large expenditure cuts in health, education and to local governments (Andeweg: 2000). Micromanagement policies were staunchly reformed to into the areas of the ‘three Es’: economy, efficiency and effectiveness. The leaders and largest union confederation gathered in 1982 to set recommendations as set in ‘Accord of Wassenaar’ which focused on recovering profits, stimulating employment growth and recommendations in industrial relations policy (Karsten, 2008: 44).

In 1990s, the ‘Dutch miracle’ was coined thanks to the new system which resulted in low government deficit, relatively low wages and fast growing labour market in the economic boom in the 90s (Green-Pederson, 2001: 308). The Dutch miracle was largely organised by, according to the Jean-Claude Trichet of the French Central Bank, was due to the Polder Model (Karsten, 2008: 44). The Model mandated low level of social unrest, and consensual style of policy making and negotiations through the public and private sector.

The Polder Model
Originally, the polder refers to cooperation amongst Dutch farmers to protect its new polders which were originally claimed from sea and rivers against the water (Karsten, 2008: 47). Water management was under ‘waterschappen’ or Dutch water board, in which according to the Dutch etymologist Eword Sanders, is one of the world’s oldest form of democracy still in existence (Karsten, 2008: 47). Polders could only have been properly managed against the rising tide of sea if all farms are to cooperate or else any form of resistance would fail (Andeweg, 2000: 698). This form of decision-making between the state and its people has been developed for hundreds of years and it still remains an influence. Throughout the Dutch system since the rebellion of the Spanish King Phillip II against his absolute sovereignty, the Dutch had the tendency of forming a consensus-driven management (Karsten, 2008: 41). To build and maintain dikes, dams and drainage channels, committees on which villages, towns and local nobles had their representatives which provided mechanism for cooperation amongst them (Karsten, 2008: 41).

The broad definition of the Polders Model relates to a specific institutionalised decision-making style related to neo-corporatism (Karsten, 2008: 38). Furthermore, it also focuses on the state in able to persuade the public using the media to accept its policies (Karsten, 2008: 38). Neo-corporatism involves continuous involvement of the private sector in shaping policy decisions and improve legitimacy by the public sector. This political-economy model came into practice after the dismantlement of the Soviet Union and capitalism has been the dominant force of economics (Karsten, 2008: 39). However, the demise of the Communist enemy did not lead to full-swing ‘glorification of capitalism’ as its the only orthodox political system. In 1991, Michel Albert, a French banker and intellectual argued that the victory of capitalism did not necessarily mean that only the Anglo-Saxon method of capitalism as the only legitimate variety (Karsten, 2008: 39). There had been new contest of capitalism after the collapse of the Soviet. Within Western Europe, there were two competing capitalist-style system. For example, one those propagated by Reagan-Thatcher on free market and on the other hand the Rhineland model with its strong emphasis on regulated market economy (Karsten, 2008: 39).

There are five key aspects that characterise the Dutch system of decision making. Firstly, the mutual commitment of cooperative attitude on the part of Dutch unions and employers associations. By negotiating in industrial relations, wage inflation and unemployment could be solved without the use of the state. Secondly, joint fact finding or information exchange amongst negotiation parties who are seeking to compromise so that the majority of stakeholders would support to follow through. Thirdly, willingness to compromise has become the essential tool to find the result that are acceptable, especially between the state and civil society. Fourthly, prioritisation of tasks and subjects for negotiation instead of being sidelined by non-core issues. Fifth and finally, there has to be a balance between centralisation and decentralisation of government role on its affairs. Furthermore, this includes non-state actors such as corporate, civil society, lobby groups and other affiliates and how they manage their structure to make operations more efficient. The general aim is to gain agreement between the government and social partners (Karsten, 2008: 42).

Consensus Democracy
Throughout the post-war history, many parties formed a coalition through consensus negotiation. The Netherlands is always governed by a coalition to form a functioning government. The politics is driven by consensus democracy where parties need to find shared agreement to put forward as policies. In much of the 20th century, pillarisation has caused conflicts amongst religious groups and social classes and the only method of progressing forward was to cooperate and to maintain peace (Woldendorp, 2005: 175-177).

The negotiation of coalition agreements involves resolutions of many conflicts amongst parties that would otherwise threaten to dismantle the weak coalition. The coalition agreement is essential in engraving both shared contents and agendas, and it is treated in ‘Holy Bible’ style to claim legitimacy on the merits of policies (Andeweg, 2000: 700). The Dutch Prime Minister has only few powers and lacks the power to reshuffle the cabinet, set agendas and cannot give policy directives to other ministers (Andeweg, 2000: 700). It is to maintain horizontal power distribution amongst coalition-parties instead of being concentrated by very few politicians.

Consensus-seeking extends beyond the political negotiation. The Netherlands has unusually low turnout in general election and so it must take mandate of its policies by engaging with civil society and interest groups (Andeweg, 2000: 702). To secure support, the government consults interest groups throughout the policy-making deliberations. Through this method, it gains valuable information and inputs from the private sphere and legitimacy for its policies. In return, interest group would gain influence and recognition in the political sphere (Andweg, 2000: 702). There are many advantages to consensus driven policy-decisions. Firstly, the obvious advantage is the high legitimacy of decisions that emerge from consultations, even if these decisions are not overwhelmingly popular. Usually, protests would evaporate once a decision is taken after consultations. The second advantage is the continuity of government policies beyond the cycle of political term (Andeweg, 2001: 704). It is often that government policies would overlap with its predecessor and successor’s policies because of the involvement of both opposition parties and organised interests in policy-making (Andeweg, 2001: 704). This system reduces the radical departure from existing policies and minimises the see-saw between radical ideologies such as nationalisation and privatisation (Woldendorp, 2005: 180). However, there are two disadvantages to the consensus driven policy-making. Firstly, the process involves so many non-state actors that it makes policies structurally ambiguous and deliberately vague to keep the maximum number of parties in support. Such culture is developed including the infamous ‘gedogen’ or ‘to tolerate’. The law is strict enough to satisfy the opponents of particular practice but is not always applied to satisfy its proponents (Andeweg, 2000: 704). Usually the social norms and practice takes greater emphasis than government policies that are willing to confront these extensive social practices. Secondly, consensus-driven mode often is cumbersome and slow to transform into policies. If the minority party in the coalition decides not to agree with proposed policies, then majority parties will often prefer not to force issues to a voting (Andeweg, 2000: 704).

Conclusively, there seems to be a wide base in horizontal power distribution where consensus is attempted as much as possible. Since coalition is a must to govern in the Netherlands, policies must appeal to all its wide ranging political parties within the coalition. This means compromise while attempting to reach agreements which may take long durations. As a result, policies would be ambiguous without decisive actions taken. This compromises the sovereignty of the state and its effectiveness to govern decisively. Furthermore, due to the reliance of the government of interest groups to gain legitimacy and support of following policies, the vertical power distribution in hierarchical format seems to be shallow. The state cannot mobilise without civil society without causing political fallout since there are fragments of different parties in the parliament willing to gain popular support (Woldendorp, 2005). On the other hand, by allowing autonomous interest groups to sway influence on political sphere, there will be continuity in policy-decisions which provides confidence in the general populace, especially in business sector. Such approach provides stability and predictability in government decisions.

Religion and Socialist ideas & its Influences
Although the Dutch has had centuries of religious tolerance, the role of religion and socialist ideals has had significant influence in creating pillarisation of the Dutch society (Kickert, 2003: 127). It is indeed a pluralist society rather than wholesomely a secular in nature.

The Catholic Church had set in mind in creating the ideals of corporatism to claim greater influence through lobby groups, the church, unions and other non-state actors which continues to have affiliation with the Church. In 1891 Pope Leo XIII issued the Church’s ideas in ‘Rerum Novarum’ as reaction to the forces of modernity and its modernist ideals within its sphere of influence (Kickert, 2003: 128). It took another forty years before Pope Pius XI to collate its ideas structurally in ‘Quadrigesmo Anno’. The new ideas were aimed against the godless socialism with its ongoing class struggle (Kickert, 2003: 128). It was also a response to ‘evil’ liberalism with its primacy on individual freedom and ‘laissez faire’ market orientation. On the other hand, the Catholic wishes to maintain the state with its authority on its people and not set ideals of the free market by allowing employers and employees to negotiate in harmony. This corporatism remained autonomous but were still within an arms reach distance from the state if it ever needs to use force to settle disputes. The Church had to resolve the balance between autonomy and cohesive unity bound by an authoritarian state. The answer was ‘subsidiarily’ where the state should not interfere with its people’s corporate tendencies or lower instance if it manages to fulfil its responsibilities. The state or higher instance should only interfere if the autonomous lower instance fails to fulil (Kickert, 2003: 128).

In The Netherlands, the Catholic ideas were evident in various groups of progressive Catholics and lobby groups with a Professor of economics, Veraart as the leader (Kickert, 2003: 128). He wishes to propagate a new economic order in The Netherlands to fight against the anarchy of capitalism (Kickert, 2003: 130). The new system requires all industrial councils would allow employers and employees to jointly determine labour conditions and control production in each branch of the industry (Kickert, 2003: 130). With the support of the Church, there was a harmonious cooperation between the state, capital and labour. The Church did not want to upset this harmonious management despite the ongoing issues throughout Europe such as the Russian Revolution, escalation in Germany and the Second World War (Kickert, 2003: 129).

Protestants in The Netherlands also fought against the godless socialist ideas of class struggle and liberal individualism (Kickert, 2003: 129). Unlike the Catholic Church, it emphasises that all individuals should maintain its individual responsibility to God instead of following the hierarchy as set by the Church. Protestants are usually governed by its members and appoints its clergyman through decision-making process. Furthermore, social issues should not be left to the state and leave non-state actors and its people to determine on the basis of its moral stance. The Protestant vicar of The Netherlands, Kuyper argues on the idea of ‘sovereignty in its own circles’ (Horst, 2001: 51). The state should not have a monopoly of force, but the ‘Grace of God’ should be the sole source of governance. The state should only be the ‘carrier of the sword’ on behalf of God (Horst, 2001: 51).

Socialist movement in The Netherlands wishes to ‘socialise’ all means of production and to abolish public property. The Dutch Social-Democratic Labour Party (SDAP) published a report in the 1920 on socialisation concluding that corporatism is part of the phase towards total socialisation of the economy. It views that corporatism facilitates organisation by its employees in orderly function and to determine the conditions for the development of production (Kickert, 2003: 129). The new Labour Plan was highly influenced by the Socialist Professor of Economics Tinbergen, in which he was acquainted with Keynesian economics and the role of government in intervening to control aggregate demand (Kickert, 2003: 2003). The Labour Plan came was revisited in Roosevelt’s 1933 ‘New Deal’ to fight economic crisis using Keynesian ideals.

Pillarisation through religion and ideologies were evident in political parties, printing press, labour unions, employer associations and even geographic locations (Horst, 2001: 71). Such division caused the government to appease various pilloried institutions for support, but most notably would form into corporatism (Horst, 2001:70).

Consensus Driven Foreign Policy
Since the end of the Cold War, The Netherlands had to balance NATO relations with the United States while integrating with the European Union’s Common Foreign Security Policy. This feat has been a challenger especially in the post September 11 international relations and the polarisation of the global society on the war on terror. This section will discuss the history of Dutch foreign policy, the environment at the end of the Cold War and dealing with European foreign policies.

In demonstrating the traditional approaches in Dutch foreign policy, it is important to trace its routes of the Dutch influence in international relations. The Dutch has been driven by consensus method of negotiation and trade expansion. Since the 17th century’s rise of Dutch power in the Golden Age, the Dutch structured its ordered in mercantilism. The objective was to accumulate wealth through trade throughout the Atlantic and Indian Oceans. The world’s first multinational corporation was established under the enterprise of the United Dutch East Indies, and so other forms of financial organisation followed, such as Amsterdam Stock Exchange, which was also the world’s first (Scott, 1916: vii). History argues that the institution of the state was never that powerful after the overthrow of the Spanish rule. It was governed by the ruling commercial patricians or ‘regents’ that wishes to make peace and only would utilise aggression if it threatens their wealth. Beyond trade, legalism was explored during the Golden Age. Such actors of influence includes the 17th century Hugo Grotius, who is considered to be the father of international law and the most distinguished philosopher to mandate international institutions in which the contemporary city of The Hague enjoys (Scott, 1916: viii). His legacy was to create international seas in which all states can enjoy without hindrance (Scott, 1916: viii). The Netherlands attempted to maintain neutrality until it was invaded by Germany in the Second World War and bipolar hegemonic influences in subsequent Cold War era.

In the end of the Cold war, the collapse of the Soviet Union and Warsaw Pact undermined the status quo of Europe. It was obvious by the early 1990s, the United States no longer saw Europe as the primary strategic policy, partially because of the rise of European integration and its collective security strategy (Stahl, 2004: 419). Capitalism remained as the most viable economic system, and it had a profound influence in how the Dutch conducts its foreign policy. During the 1990s, it was evident that there were tensions between NATO and the cornerstone of the Dutch foreign and defence policies (Wijk, 2004: 172). The Netherlands wishes to maintain NATO as the principle of foreign policy instead of diverging towards the European Union. During the 1998 St Malo meeting, French President Chirac and British Prime Minister Blair called for a European autonomy in military action without being constrained by the United States and NATO as its apparatus (Wijk, 2004: 172). The centre-left government of The Netherlands concluded that the European defence should be emphasized. This was seen as a dramatic shift in its foreign policy as it meant to restore European sphere of influence throughout the globe.

In the aftermath of the September 11, The Netherlands faced difficult challenges in being occupied with domestic issues while managing to play an important role in Europe verses transatlantic relations (Wijk, 2004: 173). In April 2002, the inquiry into the events that lead to the mass murder of citizens in Srebrenica in the Bosnian War caused the government to collapse. The coalition was called ‘purple’ because of the mix of political colours within. Furthermore, it had to face the global slowdown after the 9/11 event, which caused havoc in the Dutch economy and its dwindling neo-mercantilist agenda in trade exports. Prime Minister Balkenende had to face two elections because of the growing resentment by its internal already weak coalition members (Wijk, 2004: 173). After successive elections, the new Cabinet made up with three parties appeared to be stable (Wijk, 2004: 174). It placed consensus driven negotiation as a cornerstone in solving global problems especially in the Iraq War and ongoing War on Terror. The Polder Model was restored after the national economic recovery in 2003 after the government and its interest groups’ decisions to free wages for two years in an attempt to improve export position of the economy (Stahl, 2004: 428). By 2003, there had been a dramatic shift in the parliamentary landscape where two successive elections caused 90 percent of the members losing their seats. Almost all experienced spokesmen or members with experience with foreign policy and defence policy were defeated (Wijk, 2004: 174). As a result, the Dutch foreign policy came into a standstill while it tries to solve its internal affairs.

The Iraq War has caused the biggest crisis in the transatlantic relations over the last decades. The Dutch tried to find domestic compromise in its already chaotic internal turbulent period. The Cabinet has taken into account the opinion poll stating that the vast majority of its constituents were against the participation of the Iraq War (Wijk, 204: 177). Furthermore, only 9 percent were in favour of U.S remaining as the only superpower and 61 percent favoured superpower role of the European Union (Wijk, 2004: 177). The Netherlands faced a challenge since key players in the NATO alliance has joined the Coalition of the Willing in the Iraq War, notably U.K, U.S and Spain (Wijk, 2004: 177-178). The Netherlands declared it would support the war politically but not militarily as a response to NATO deliberation. Furthermore, Belgium, France, Germany and Luxembourg sparked a crisis in the NATO just before the war in March by blocking help to its member, Turkey (Wijk, 2004: 178).

In dealing with the European integration, many Member States had to deal with whether to take a minimalist approach or maximalist approach. Minimalist approach requires not taking great initiative in Common Foreign Security Policy as it weighs more favourably towards NATO. On the other hand, maximalists argues that the European Union should be the next superpower challenging the United State’s hegemonic influence (Stahl, 2004: 418-419). The Netherlands favoured minimalist approach while France favoured expanding the E.U military capability. In dividing up the task between the E.U and NATO, the EU’s Peters bask serves as an explanation to its new structure. These tasks are incorporated in the Treaty of the European Union including humanitarian and rescue tasks, peacekeeping tasks and tasks of combat forces in crisis management. In general, the E.U would favour smaller scale operation such as through the use of Rapid Reaction Force. On the other hand, the NATO Response Force under article 5 would focus on the collective defence obligations and large scale, high-intensity combat (Stahl, 2004: 419). In summary, the Netherlands considers the European Union for a vehicle for economic integration but favours NATO for military policies (Stahl, 2004: 439).

Conclusively, it is evident in its multi-level governance in both domestic and foreign relations issues that consensus-driven decision-making has been the forefront of its deliberation. This paper demonstrates that there is continuity or integral consistency between how the Dutch behaves in both domestic policy and foreign policy. This method was not created since the Cold War, but through hundreds of years of development where the state has always been weak and must gather support from the populace. Civil society and other non-state actors has always had influence in governance. The Dutch parliament is fragmented with diverse political parties and can only create a workable government by forming a coalition. It was impossible to have momentum in its decision without consulting various interest groups and this cannot be more evident than polarisation of the Dutch society and institutions. By virtue, the state seeks cooperation by various parties since it cannot unwieldy utilise its force to mandate support. This is clear in how the Dutch government favours multilateralism rather than hegemonic force as it encourages parties to negotiate without resorting to aggression. It is unfeasible for a small state such as The Netherlands to readily use force, and so it prefers consensus-driven dialogue and seek mutual agreement.

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