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Who Rules?. Systems of governance and popular representation. I. Three Dilemmas of Governance: Why We Need Institutions. The principal-agent problem. Politics is hard work and direct democracy is impractical So we (principals) need to appoint others to represent our interests (agents)
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Who Rules? Systems of governance and popular representation
I. Three Dilemmas of Governance: Why We Need Institutions • The principal-agent problem. • Politics is hard work and direct democracy is impractical • So we (principals) need to appoint others to represent our interests (agents) • Dilemma: The agent is motivated by his/her own interests, not those of the principal • Worse dilemma: The agent knows more than the principal
2. Solutions • Tournaments – Pit agents against each other, with each agent having incentives to rat out the bad apples (requires some mechanism to prevent collusion among agents). Obvious political analogies = elections and civil service exams • Enforcement – Reward another agent for overseeing the first one (dangers of over-enforcement or under-enforcement). Separation of powers?
B. The Problem of Collective Action • Sometimes we desire public goods. Definition: • Jointness – One individual’s enjoyment doesn’t reduce that of others’ • Nonexcludability – If any person can enjoy the good, every person can enjoy the good • Examples: Clean air, low crime rates, economic growth, national security, etc.
2. Voluntary efforts fail to provide public goods • No single person’s contribution matters • If enough people contribute: • I enjoy the good if I contributed • I also enjoy the good if I didn’t contribute • So I shouldn’t contribute • If not enough people contribute: • I’m out my contribution if I contributed • I’m no worse off if I did not contribute • So I shouldn’t contribute • Free Rider Problem: Every person rationally decides not to contribute, so no public good is provided
3. Solutions • Moneybags – One person is willing, able, and necessary to provide the public good (rare) • Selective incentives – Give private good to those who agree to contribute to the public good (expensive, requires enforcement – which is itself a public good) • Involuntary contribution – Force people to contribute (really a form of selective incentive). Requires government with power to compel contributions and monitor compliance. Weak government will fail its people!
C. Arrow’s Theorem and Political Instability • Problem: How can we make a collective decision when people have different opinions? • Conditions: Three or more citizens and three or more alternatives they must consider. • Question: Is there a reasonable way for society as a whole to rank the alternatives? Could be anything – voting, polling, mind-reading, etc. Is there any system at all that would be reasonable?
4. Notation • Choices or outcomes are indicated by capital letters: A, B, C, etc. • Preferences indicated by use of letters p, I, or r: • Strong preference: If someone prefers one option to another we write: A p B • Indifference: If someone thinks A and B are about equal, we write A i B • Weak preference: If A p B or A i B then A r B. So A r B means “A is at least as good as B”
5. A minimal definition of rationality • Preferences are connected: Given any pair of options, someone can relate them with p, i, or r. • Preferences are transitive: If A r B and B r C then A r C.
6. Characteristics of a desirable aggregation technique • Universality: Our technique should apply to any group of rational people, regardless of their specific preferences about A, B, or C.
b. Non-Dictatorship • If Bob says: A p B • But everyone else says B p A • then… • We should not conclude that for society, A p B
c. Unanimity • If everyone agrees that A p B • then… • We should conclude that A p B
d. Collective Rationality • If individuals are rational, our technique should create social preferences that are rational • Remember what this means: connected and transitive preferences
e. Independence of Irrelevant Alternatives • Suppose I have the options A, B, and C. • I can rank these however I want. • One example: A p B p C • Now suppose a new option is available: D. • I must not change the order of A, B, and C relative to each other. • Starting with above example: • D p A p B p C OK • A p D p B p C OK • A p B p D p C OK • A p B p C p D OK • D p B p A p C Not OK (B and A swapped places) • Restaurant analogy: Waiter offers chicken or fish. I like chicken better. Waiter comes back and explains there is also beef. I now decide I want the fish. (Not OK)
Characteristics of a desirable aggregation technique (review) • Universality: Applies to people with different values or beliefs • Non-Dictatorship: No one person’s preference outweighs everyone else together • Unanimity: If everyone prefers one option to another, then so should society as a whole • Collective Rationality: Should produce a transitive ranking of options • Independence of Irrelevant Alternatives: New options don’t change the relative ranks of earlier options
7. Conclusion and Implications • Arrow proved these conditions cannot all be true! • Implications • Every voting system is imperfect • There are times when there is no single “national interest,” “general will” or “will of the people” • Rational individuals may not make a rational collectivity • Preference cycles and the power of agenda-setting • Voter 1: A p B p C • Voter 2: B p C p A • Voter 3: C p A p B • SOCIETY: • A p B • B p C • C p A!
e. The Chaos Theorem • Developed to explain bargaining in legislatures under majority rule • Finding: If there are two or more dimensions that legislators care about, then there is usually no optimal policy. • Implication: Need some rule other than majority rule to ensure stability
Basic set-up: Ideal points Jesse Ventura Walter Mondale Libertinism Norm Coleman Jerry Falwell Gov’t intervention in economy
Basic set-up: Indifference curves Walter Mondale Libertinism Gov’t intervention in economy
Three parties bargain Ideal points A Status quo B Indifference curves C
The Danger of Cycles: B Makes a Proposal A B Butter C A’s “preferred-to set” B’s “preferred to set” Guns
C Makes a Proposal A B Butter C A’s “preferred-to set” B’s “preferred to set” Guns
A Makes a Proposal A B Butter C A’s “preferred-to set” B’s “preferred to set” Guns
8. Solutions • Dealing with Arrow’s Theorem: Voting rules • Restrict agenda-setting: Rules that prevent more than two alternatives from being considered • Dictatorship: Someone is a veto player • Violate independence of irrelevant alternatives: Voting mechanisms which allow entry of a third party to reverse the social preference order of candidates (Nader in 2000, Leftists in France)
b. Dealing with the Chaos Theorem: Legislative Rules • Defer to committees: Establish a separate committee for each dimension so proposals aren’t made simultaneously on each dimension
Example: The Guns Committee A B C Guns
Example: The Guns Committee This position (median voter) beats all others. No cycles! A C B Guns
b. Dealing with the Chaos Theorem: Legislative Rules • Defer to committees: Establish a separate committee for each dimension so proposals aren’t made simultaneously on each dimension • Germaneness rules: Prevent new issues from being linked to current one • Agenda-Setting power: Limit to majority party, Prime Minister, committee chairs, etc. (So A, B, and C cannot all propose legislation) • Bicameralism: If two houses must agree on any change, range of cycles is reduced • Supermajority rules: Generally increase stability by making it difficult to change status quo
II. Constitutional Design • Which goals are most important: stability, representation, rights, security, etc.? • How can the constitution itself be made legitimate? Must account for popular preferences and customs… • Which things should be in the constitution (as opposed to being left up to the legislature)? • Institutions: How laws are made and enforced • No difference in success rates of long vs. short constitutions (studies of US states) • How can the constitution be amended?
III. Federalism? • Federalism allows self-rule for geographically distinct populations (concentrated minorities). Decreases risk of revolutionary civil war. • Few truly federal systems have evolved into unitary systems but some unitary systems become federal ones (UK, Belgium as recent examples) • Danger: Many examples of failed federations (Yugoslavia and Czechoslovakia, 1992). Increases chance of secessionist civil war.
IV. Structure of Executive-Legislative Relations • Presidential System • President is both head of state and head of government • Chosen in a national election • Shares some powers with legislature, but also has unique powers and high degree of autonomy. • Serves a fixed term of office
B. Parliamentary System • Chief executive is a member of parliament (MP) – leader of majority party. Called prime minister (PM) or premier. • PM governs through Cabinet ministers (also MPs). Ministers typically have real power over agencies. • Not directly elected – chosen by majority party in Parliament. • Terms set by law – but early elections possible (no confidence motion, snap elections). • Fusion of powers instead of separation of powers – legislature is supreme
C. Dual Executive • Hybrid of President/Parliament: Country has both President and PM. • President usually head of state, represents country, often concludes treaties • PM typically runs the ministries and administration, oversees bureaucracy • May be Presidency-dominated (France) or PM-dominated (Chancellorship in Germany)
D. Presidentialism is Rare. Why? • Of 121 electoral democracies in 2004: • 60 Dual Executive • 56 Parliamentary • 5 Presidential
1. Which alternatives work best? • Ignore dual executive for now – pit one “pure form” against the other
2. Advantages and Disadvantages • Preface: Just because there’s something on either side of the scale doesn’t mean they are balanced • Acknowledge +/- of each system, but • Weigh +/- to find better system
3. Evaluating the Dual Executive • Remedies some problems (those in which difference can be split) • Cannot remedy others (timing of elections, personalism) • Creates new one: Co-Habitation
4. Empirical Research: Presidential Systems Fail • Out of 31 countries that have had continuous democracy since 1967, only 4 have presidential systems (Columbia, Costa Rica, United States & Venezuela – and Venezuela is barely democratic) • Only 7 out of 31 ( 22.6%) presidential democracies have endured at least 25 consecutive years, compared with 25 of 44 (56.8%) parliamentary systems.
V. Structure of the Legislature • Unicameral (75% of current legislatures) • Most common in unitary states (no need for second house to represent sub-governments) • More efficient: Easier to change policy • Bicameral (25% of current legislatures) • Most common in federal states (upper house represents sub-governments) • Less prone to shifting positions, especially when elections are staggered (not all seats shift at once) • More prone to deadlock and divided government; less democratic (upper house selection)
C. Roles of an Upper Chamber • Upper-chamber support rarely needed for coalition formation and preservation – lower house critical • Upper-chamber frequently acts as veto player for policies • Upper chamber majorities do tend to increase coalition duration (stability)
VI. The Judiciary • Judicial review • Some democracies lack judicial review: Belgium, Finland, The Netherlands and Switzerland, do not have judicial review. • Some states (Israel, New Zealand, the UK) have judicial review in practice, but not in theory. In the UK, the binding nature of EU law has given the courts the role of judicial review.
B. Judicial Activism: Varies by country 1. Definition: Striking down laws passed by the government
2. Results from new democracies • Surprise: Formal judicial power not related to degree of activism • Mentioning more rights actually decreases activism • Divided government or fragmented parties increase judicial activism • High levels of confidence in courts vs. parliament increase activism
VI. Electoral Systems • Diverse methods of election are possible. Here is one system for organizing them: