Most of the explanations for this turn of events centre on a list of mistakes by Abbott and his team as they go through the usual wobbles of a new government on training wheels. But what if something bigger is going on? What if this is not a temporary thing? What if government dysfunction and swift public rebuke is the new normal? Many of the problems being encountered by the Abbott government are exactly the same as those suffered by the Gillard and Rudd governments. It seems the same forces that worked so brutally against Rudd and Gillard - which Abbott as opposition leader rode with such alacrity - are now turning more quickly than ever on the new incumbent. These forces include: the merciless scrutiny of the 24-hour news cycle, a fragmented and unforgiving electorate, a Parliament that cannot be controlled, a tightening budget situation and a world in which it is a lot harder to lead and get things done.

The experience of governments internationally is the same, if not worse. Almost every advanced democracy in the world has a deeply unpopular government that is unable to deliver on its policy agenda. Among the 34 advanced economies that are members of the OECD, only four have a government that has an absolute majority in Parliament. In Australia at least, most of the commentary about the problems of government centre on the performance of the political actors. Like a sporting contest, the result is very much seen to rest on the shoulders of the players. This leads to the simplistic prognosis that the situation can be rescued by the oft-cited panacea of ''better leadership''. But it is not credible to argue that every advanced democracy is suffering from poor political leadership. The more logical explanation is that the rules of the game have changed and this is a very difficult time to be in government. One provocative diagnosis of the situation is contained in Moises Naim's new book, The End of Power. Naim draws on his experience as the former minister for trade and industry for Venezuela and editor of Foreign Policy magazine to argue that power is both shifting and in decay. In a fast, crowded, mobile and hyper-connected world, the ''barriers to markets'' are coming down but so, too, are the ''barriers to power''. From boardrooms to battlefields, from churches to nation states, being in charge just isn't what it used to be.

In a geographic sense, power is shifting from West to East and from north to south due to the rapid growth in developing nations such as China, India, Brazil and others. Power is moving from traditional institutions to networks, from old states to non-state actors, from established corporations to start-ups and from state control to market forces. But Naim's most radical argument is that power itself is in decline because power has become easier to get, harder to use, and much easier to lose. An example of this is the shortened average tenure of prime ministers, presidents, corporate CEOs and other leaders. We now live in a world where it is easier than ever to be the challenger and harder than ever to be top dog. Remember when Abbott was referred to as Australia's best ever opposition leader. Now the new Opposition Leader Bill Shorten has taken that title. Perhaps the explanation for this turn rests not with the individuals but the political environment. Does anyone believe Tony Abbott will be Prime Minister for as long as his political hero, John Howard? This is not intended as a judgment about their respective political skills. Rather, it is another reflection of the changing rules of the political game. I had the great privilege of working closely with Australian prime minister Julia Gillard and two premiers, Steve Bracks and John Brumby. I was struck by the fact that leaders do not have anywhere near the power that the public often imagines they do.

In a deregulated economy, politicians haven't controlled interest rates, the exchange rate, wage levels or prices for decades. Nor do they hold sway over industries like they did when they were protected by tariffs or regulation or even owned by the government. At a state level, the decline is even more marked, with state governments lacking the power to raise sufficient revenue to perform their constitutional duties while unable to borrow to build vital infrastructure due to the straitjacket of the AAA credit-rating debate. Despite all this, citizens still have an almost childlike expectation about the power of government to deliver for them. This has been fuelled by a political environment in which citizens have been fed on a culture of entitlement and told there are simple answers to intractable problems. The disjuncture between expectations and capacity is filled by a sharp decline in trust and confidence in political institutions. To make things even harder, a fragmented electorate makes it difficult for any party or group to command a majority. And citizens are less wedded to political parties and ideologies and will switch allegiances like changing their brand of toothpaste. In his new book Dog Days, Professor Ross Garnaut talks about the reform era from 1983 to 2000. He argues that the reforms of this period - deregulation, superannuation, the GST and so on - helped create our current prosperity. But, according to Garnaut, the political system has changed in a way that makes good policy harder to achieve. He believes a new media culture, timidity of political professionals and the outsized influence of vested corporate interests has meant Australian governments have put the reform cue back in the rack. Proving his point, Australian policy making is littered with recent failures. In 2010, the government attempted the introduction of a new mining tax. The mining industry responded with unprecedented fury, spending $22 million in a six-week advertising campaign, and Labor lost its nerve. The tax was dropped and replaced by a vastly diminished alternative.

But the debate on climate change provides arguably the best example of the challenge to reformers in this new era. The introduction of a carbon price and an emissions trading scheme is overwhelmingly viewed by economists and policy makers as the best response to tackle damaging climate change caused by carbon pollution. Despite previously supporting an ETS, the Coalition from late 2009 embarked on a political campaign to win power by falsely attacking the policy as a ''great big new tax'' that would put a ''wrecking ball'' through the economy. On one level, the Coalition looks like it has succeeded. It is now in government and the move to an ETS is likely to be abolished by the new Senate after July next year. But here is the rub. The Coalition government's alternative ''direct-action'' plan is even more unpopular than the carbon price. And the new Senate is unlikely to support the centrepiece of the Coalition policy, the purchase of abatement through direct payments from government to polluters. So from 2014 Australia will have abolished the carbon price but will not have any policy to replace it. Faced with arguably the biggest challenge of our era, we do nothing. This is what US political scientist Francis Fukuyama calls ''vetocracy''. We know what we are against but we no longer know what we are for. A combination of ideology, political opportunism and the traditional checks and balances on power have metastasised to produce a crippling paralysis. As the climate change case study shows, the idea that the Abbott government's problems will be solved with the formation of the new Senate next year does not stack up. The right wing populist parties that are likely to control the chamber from July will not be any easier to deal with than the Greens, in fact they will almost certainly be harder.

Australia is not alone in facing the challenge of vetocracy. In the US, the government is lurching from one embarrassing budget crisis to another. More than 90 per cent of Americans want gun reform but no one in power can craft a reform proposal that will pass Congress. In Europe there has been two recessions in four years, yet governments continue to miss opportunities for vital policy reform to meet their chronic economic challenges. So what is to be done? At some point citizens need to ask if their public institutions - invented at a time when our civic leaders wore wigs and travelled by horse and buggy - are still fit for purpose. Almost all of our modern political institutions were invented in the 18th century and virtually none have been developed since. We need new institutions that have the power to get good things done. In America some leading policy thinkers with recent experience in government are starting to write, albeit reluctantly, about the need to counter the gridlock by winding back democracy. In Australia, the setting of interest rates by the Reserve Bank is done in a process that since the 1990s has been closed off to direct political influence. Importantly, the reasons for RBA decisions are published to allow for scrutiny and public debate. The argument follows that this type of process could be extended - in a very careful way and with democratic support - to other areas of macro policy such as setting emissions reduction levels, infrastructure project selection or government borrowing levels.

In other areas there seems to be considerable promise in an extension of democracy. The Labor Party recently introduced direct election of its party leader by ordinary members. It has proven to be a shot in the arm for the organisation, with dozens of lively town hall debates and thousands of new members joining the party. This reform should now be extended to the state level. And the Liberal Party should follow suit, like the British and Canadian conservatives have done. We also need a concerted campaign to increase political participation. There are many new avenues into the political process that governments and political parties could be encouraging: the use of primaries to give more people a say in the selection of party candidates; the use of social media to encourage more political debate and input into decision making. University of Melbourne academic and former political advisor Mark Triffitt points to democratic innovations like the use of a citizen jury to decide an issue on behalf of a community. The jury is made up of randomly picked people who have a policy issue presented to them. The process allows for the cross-examination of policy experts, followed by debate and a verdict. These sorts of ideas need debate and development. But given the challenges we face, the conversation about political innovation must start now. Nicholas Reece is a public policy fellow at the Centre for Public Policy at Melbourne University.