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Political polarization is preventing the government from addressing problems that gold back economic competitiveness, Harvard Business School says.

Partisanship and democracy's other ills holding down the economy, Harvard study says

The many problems with American democracy are a central reason the country has made so little progress in tackling major challenges during a decade of economic growth, Harvard Business School concludes in an ambitious report out this week.

More precisely, the report blames the Democratic and Republican parties for looking to advance partisan advantage over the public interest — wasting a valuable opportunity to improve health care, the education system and infrastructure during a time of expansion so the country might become more globally competitive in the long haul.

"Electoral and legislative rules serve the parties well but cause gridlock and disable our democracy," concludes the report, one of the most comprehensive in a long roster of recent studies about governmental dysfunction and its consequences.

Titled "A Recovery Squandered," it is the latest in a series on the country's economy produced by the school. With Harvard professors Michael Porter and Jan Rivkin as principal authors, it is based on research as well as interviews with the public and members of the business school's prestigious alumni network. (A main author of the chapter on gridlock was Katherine Gehl, the founder of Democracy Found, which advocates for alternative voting systems.)

Among the most important conclusions:

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  • Many people do not understand the structural problems that have gridlocked the government. Instead, they think we have just elected the wrong people.
  • Those surveyed support fixing the system, but more attention is given to high-profile reforms like regulating the campaign finance system and eliminating gerrymandering to perpetuate the party in power. More attention should be given, the report's authors believe, to less publicized but more potentially powerful reforms including nonpartisan primaries and ranked-choice voting.
  • The people perpetuating an increasingly partisan duopoly are not only the parties and their elected leaders, but also the attendant infrastructure — which they dub the "political industrial complex" — of lobbyists, big-money donors, super PACs, think tanks, consultants and the national media.

The report marshals a variety of statistics to make its central argument including:

  • The percentage of people who told pollsters they trust the federal government always or most of the time has fallen from 77 percent in 1964 to 17 percent this year.
  • A survey two years ago found 44 percent of Democrats and 45 percent of Republicans view the other party "very unfavorably" — compared to less than 20 percent in 1994.
  • More people identify as independents, 41 percent, in 2019, than Democrats (30 percent) or Republicans (28 percent), evidence according to the report of declining confidence in the parties.

The report calls for reforming the rules of Congress to remove what it says are obstacles to bipartisanship.

One is the regularly applied policy of the House majority leadership known as the Hastert rule, because GOP Speaker Dennis Hastert started applying it in the early 2000s. It says no bill will be put to a floor vote until a majority of the majority supports it, or sometimes until it is assured of passage entirely with the majority's votes. This effectively negates the need for the minority party's input in policy making.

The report also blames the role that business plays in politics for exacerbating the problems with democracy: "We believe that much of today's business involvement in politics may actually be working against business' longer-term interests."

It cites the hiring of former government officials, especially those who lobby their former colleagues, and a lack of transparency by companies about their political involvement as two of the problem areas.

The report is not all doom and gloom, however, with the authors noting that many companies and their leaders are trying to "adopt a broader corporate purpose as their central goal, going well beyond maximizing shareholder value."

A consensus is emerging, the report states, for a new role for business in politics and it proposes a set of voluntary standards.

These include a reduction in spending on special-interest lobbying; greater support for solutions-oriented candidates; an end to hiring former government officials to lobby; and support for democracy reforms to reduce partisanship and change electoral and legislative rules.

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