Democracy Works: No Quote Mark Edition

A friend of mine recently argued that democracy would “work” if only the “right people” were elected. Happy belated birthdays, Mr. Washington and Mr. Lincoln. Because my friend isn’t alone in expressing something like this, I wanted to address it as a follow-up to the Easterly post I reblogged.

To my mind, if that is the best that can be said of democracy – and it’s the best thing I’ve heard him say about it – then it seems at first glance to have very little to recommend it as a system of government above anything else that has been tried. (Cue Winston Churchill.) Monarchy “works” if you have the “right people.” I’d even grant that communism and fascism “work” if you have the “right people.” I think the United Order is the best system that could be devised, but turned out not to be sustainable because we didn’t have the “right people” trying to live it (a critique of the citizens rather than the leaders).

I argue that even if we are forced to accept his null hypothesis, democracy still looks pretty good.

If there is only a two-case world, where the system “works” and where it “doesn’t work” – whatever that means – then the institutional issue is to choose a system to maximize the probability of “it works.” If any system only “works” when the “right people” are chosen [assuming the null hypothesis is true], then the primary basis for deciding between systems is how often the “right people” are in power.

If that is the case, then democracy is GREAT! Why? Let’s assume you don’t know if someone is the “right person” until after he or she has been in office for a while – removing the “all people from my party are the ‘right people’” line. You observe the people in power for a time, and if you find that they aren’t the “right people” they can be voted out and you get a new random draw. In a monarchy, you have to wait for death and there's some pretty awful autocorrelation problems (ie - bad kings tend to be followed by bad kings). In Soviet or Chinese communism, the party decides when its own leaders are not the “right people” – which has happened on occasion, but there are some admitted incentives pointing in the other direction.

So if we’re dealing with a world of “works” and “doesn’t work,” the primary institutions that matter are viable free multi-party elections and the institutions that increase participation, transparency, and accountability – a free press, independent judiciary and election commission, and a host of others. With them in place, democracy works. You won’t get good things every time, but you’ll have to live under the “wrong people” for a shorter time than with any other system.

But what if we’re dealing with a slightly more complex world? Maybe the “right people” just make it a bit more likely that good things happen and less likely that bad things happen, or that better things happen in good times and not-as-bad things happen in bad times. I’m keeping this deliberately vague because if I define my idea of “works” and “good things,” we can get bogged down in debating that. Suffice it to say, there is a continuum, and government is capable of both good and bad things. [For the Libertarians in the crowd, good things includes securing private freedom.]

A politically risk-averse or loss-averse person – and I submit 1) that’s most of us most of the time according to economics research; 2) that’s certainly true of conservatives, almost definitionally; 3) it’s true of the left too if they think about it: Do you really want to give, let’s say Sarah Palin, the ability to dismantle all of Obama’s achievements should she be elected after him with little more than an ‘aw shucks’? Didn’t think so, you loss-averse lefty you ;) – A risk-averse or loss-averse person wants to maximize the average, yes, but also wants to minimize the variance.

What additional institutions become important then? Checks and balances. Put constraints on the executive and legislative, the judiciary and the Fed, move from absolute to constitutional monarchy, set up slow-moving, inertia-laden bureaucracies, establish things that government cannot do, protect minority rights from the tyranny of the majority, on and on. The more difficult it is to ram anything through, good or bad, the lower your variance. Then if you have established at the beginning the rule of law and an elections system that maximizes the probability of good outcomes, you will tend over the long run to have a modestly-high set of good things.

Democracy won’t look stellar most of the time even with these institutions. Yes, maybe a benevolent dictator could do a lot of good faster. China and VietNam have done wonders in the last few decades. But the wrong kind of dictator can wreak far more havoc in far shorter a time. That will be avoided most effectively by combination of institutions we call democracy. Yes, there are certain presidents and prime ministers we wish could continue serving longer. And how thankful we all are that 'that guy' (we all have at least one) couldn't go another term.

Democracy works. It maximizes the probability of good things in part because it has the ability to self-correct when things go wrong and it minimizes the harm that can happen when it does go wrong. Over the long haul – and what citizenry really wants government to focus only on the short term? – Democracy works.