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1 This is the published version of a paper published in Homo Oeconomicus. Citation for the original published paper (version of record): Staal, K., Brouwer, P. (2018) The Democracy of the Future: Do Voters Want It? Homo Oeconomicus, 35(2-3): Access to the published version may require subscription. N.B. When citing this work, cite the original published paper. Permanent link to this version:

2 Homo Oecon (2018) 35: COMMENT The Democracy of the Future: Do Voters Want It? Comment on Proposals for a Democracy of the Future by Bruno Frey Peter Brouwer 1 Klaas Staal 2 Received: 28 November 2017 / Accepted: 20 April 2018 / Published online: 25 May 2018 The Author(s) 2018 Abstract Frey (Homo Oeconomicus 34(1):1 9, 2017) makes several proposals to reform and extend democracy. In this contribution, we first consider the desirability of these proposals from the point of view of a rational self-interested individual. We then conduct a questionnaire to quantify the actual support among voters. It turns out that many proposals lack support in both cases. We conclude that in making such proposals, one has to take into account not only pre-existing democratic institutions but also the support such proposals can expect from rational self-interested individuals. Keywords Direct democracy Voting weights Referendums Random decisions Elections JEL Classification D02 D70 D72 H10 Z18 1 Introduction In his contribution, Frey (2017) presents nine proposals of how participation rights in democracies can be reformed. We consider the desirability of these proposals from the eye of a homo economicus, a discussion thus based on the Public Choice approach, i.e. assuming that individuals are rational actors and respond systematically to relative prices determined by institutional conditions (Frey 2017, p. 2). * Klaas Staal klaas.staal@kau.se 1 Beurtvaartstraat 46, 7311 MR Apeldoorn, The Netherlands 2 Karlstad Business School, Karlstad University, Universitetsgatan 2, Karlstad, Sweden

3 134 Homo Oecon (2018) 35: Additionally, based on a sample of 265 Dutch voters, we gauge the desirability of the Frey s proposals from the eye of the homo nederlandicus. In the second section, we start with how a rational self-interested agent assesses Frey s proposals. We argue that from this perspective, there are deliberations both in favor as well as against many proposals, and that one can therefore not say a priori whether the electorate supports the proposed reforms. For some of the proposals in Frey (2017), e.g., voting rights for commuters or immigrants, the connection with the existing Dutch political institutions is straightforward. For others, especially the direct democracy, this is less so the case, as the proposals for reform made by a Swiss citizen, inspired by a system deeply imbued by direct democracy, have a less direct fit with the Dutch system of representative democracy. We discuss how we adjust the proposals and what the opinions of Dutch voters are in the third section of our contribution. In the concluding section, we confront the viewpoints of the homo oeconomicus with those of the homo nederlandicus. This is an essential step, not only for validating the theoretical reflections, but also to get an insight on preferences when the theoretical considerations do not reach a firm conclusion. 2 Some Considerations of Frey s Proposals In this section, we look at Frey s proposals from a public choice perspective. That is, we discuss the effects of reforms from the point of view of a rational self-interested individual. These effects include potential changes in the outcome of decision-making, the acceptance of its outcome, but also indirect effects like the possibility that extending the franchise helps with the integration of immigrants. Following Frey (2017), we group the proposals in four categories. 2.1 Variable Voting Rights We start by looking at the ideas in Frey (2017) suggesting the introduction of voting rights with variable weights. For all three proposals, it holds that the outcome of decision-making can change closer or farther away from an individual s most preferred outcome after enlarging or shrinking the electorate. The proposal to extend the franchise to commuters, for example, also affects the non-commuters. Their influence on decision-making decreases substantially if a large group of commuters gets half a vote right in the community. This could become salient in decisions like changing a local park into a parking lot or using funds for the local school instead for a road to facilitate commuting. Other aspects than the outcome of decision-making may also play a role. It could be that extending the franchise increases the acceptance of political decision-making, or that it assists in the integration of migrants in society. Finally, an argument in favor of withdrawing the voting rights for emigrants is that, typically, they will no longer be affected by and thus do not have to bear

4 Homo Oecon (2018) 35: the consequences of the decision-making. 1 We can therefore not conclude whether a majority supports these three proposals or not. Now consider the proposal of giving the elderly a higher vote weight when deciding on the rules of future decision-making. For the elderly, it does not change the benefits of voting very much, as they will barely be affected by these constitutional changes. We therefore conjecture that the elderly will be indifferent. Obviously, this will be different for younger people, who will be excluded from the decision-making process. Frey s motivation that the elderly can decide more objectively on these issues is also not convincing for a young person, as this person is able to take decisions in his or her best interests. Even when an individual expects that a majority of the total electorate does not support this preferred outcome, there is no reason for this individual that the elderly would support it. 2 Another reason is that the elderly are less affected by the consequences by these changes in the decision-making process. 3 We thus conclude that a majority of a rational self-interested electorate rejects this proposal. 2.2 Democracy in New Areas Then consider the group of proposals concerning the application of democracy in new areas, like firms and functional political units. These two proposals are so broadly formulated, that there is not much specific to say on whether a rational selfinterested individual would back them. It depends on the new area whether the perceived benefits of participating in the decision-making process exceed the costs and thus whether a rational self-interested individual would like to see these reforms being implemented or out of rational ignorance (Downs 1957) rejects them Close Majorities in Referendums Instead of determining the referendum outcome by a random draw, as discussed in the next subsection, it is possible to enforce a second referendum on a new proposal, when the outcome of the first referendum is close. The proposal of the second referendum is based on a compromise advanced by the losing minority in the first referendum. This obviously increases the costs of decision-making, as a second vote implies a doubling of the cost of casting a vote and an increase in time before a decision is reached. The compromise reached can be closer to or farther away from the most preferred options, and it is not clear for the self-interested rational individual 1 Nurmi (2017) even suggests that Frey s main intention for giving migrants the right to vote is to further their integration and presents the argument of not-living-through-the-consequences as a reason to reject the proposal to give the elderly a bigger role (see the discussion below). 2 Dowding (2017) and Kendall (2017) also mention the potential divergence between preferences of the young and those of the elderly. 3 See also Nurmi (2017). 4 Note that Fox and Johnston (2017) and Kendall (2017), following different lines of argumentation, come to similar conclusions.

5 136 Homo Oecon (2018) 35: which of the two will be the most frequent in the referendums that will be organized in the future. Moreover, it is not sure that a referendum on a compromise in a second referendum commands a substantial majority and hence is not going to be submitted to the same constitutionally-sanctioned compromising again. Since the costs of decision-making increase and the expected benefits of voting change in an indeterminate way, we expect that rational self-interested individuals reject this proposal. 2.4 Introducing Randomness May (1952) states a set of conditions under which decision by a referendum is optimal. The proposal to determine the outcome of a referendum by a lot with the weights given by the vote shares is thus not optimal (it infringes Conditions I and IV in May 1952). On the other hand, this proposal increases the incentive to vote, irrespective of how big the margin of winning or defeat for one s position, as casting a vote increases the vote share of and hence the probability of implementation of this position. 5 This could be positive if it increases, for example, the acceptance of the decision reached. Finally, when random draws from the underlying electorate are combined with elections, as Frey writes, the advantage of equality and fairness must be compared to the disadvantage of lower competencies (Frey 2017, p. 7). Hence, depending on, e.g., the area of decision-making and how equality is regarded, an individual accepts this proposal or not. 6 3 Dutch Voter s Considerations of Frey s Proposals Most of Frey s proposals are inspired by the democratic institutions found in Switzerland. This is especially the case for the proposals on direct democracy. Some other proposals, however, are rather abstract, like the proposal on extending direct participation rights to technocratic regimes. A more specific proposal is then necessary to measure an electorate s support. In this section, we subsequently present how we translate each one of Frey s proposals to the Dutch situation, and then measure its popular support with a questionnaire. This questionnaire contains ten (in favor; against; no opinion) questions and is answered by 265 respondents. 7 We directed the questionnaire at the Dutch electorate as both (Dutch) authors are most familiar with the Dutch institutions and can thus relate Frey s proposals best to the actual situation. Nine of the questions are directly based on Frey s nine proposals, one additional question is motivated by the small role direct democracy plays in the Netherlands. These ten questions are discussed in detail below. Additionally, we ask 5 Note that Kantorowicz (2017) makes the same observation. 6 See Tridimas (2017) for a more extensive discussion. 7 The questionnaire (in Dutch) is accessible on https ://docs.googl e.com/forms /d/1l2sv LbcPG -3Wk6m dnqsp MUQmD zplmx gsfcd FI4gV 4ZA/viewf orm.

6 Homo Oecon (2018) 35: Table 1 Population characteristics compared with the sample figures of the 265 respondents of the questionnaire Sources: Brouwer and Staal (2017), CBS (2017), own calculations Gender Population Sample Age Population Sample Level of education Population Sample Female 50% 49% % 3% 1. 11% 0% Male 50% 51% % 14% 2. 15% 1% % 36% 3. 7% 1% % 35% 4. 30% 7% > 65 23% 13% 5. 9% 11% 6. 18% 41% 7. 10% 40% Average difference 1% Average difference 7% Average difference 16% # respondents 247 # respondents 210 # respondents 251 We have only considered individuals eligible to vote, i.e., older than 18. None of the respondents indicated an age lower than 18 The numbers representing the level education are increasing in the level, from 1 indicating only basic education and 7 a university education

7 138 Homo Oecon (2018) 35: three questions (gender; age; level of education) to gauge the representativeness of the respondents (in contrast to the previous ten questions that need to be answered before the form can be submitted, answering these questions is optional to prevent decreasing the response rate). Table 1 presents a comparison between the characteristics of the Dutch population and those of the sample of respondents. It shows that with respect to gender and age the respondents are a fairly representative sample of the Dutch population, with average deviations of only 1 and 7%, respectively. The higher education levels, however, are overrepresented in our sample, in line with previous research that shows that it are primarily the highly-educated citizens who are politically active online (see, e.g., van de Pol et al. 2014). Finally, we give the respondents the possibility to make their own comments at the end of the questionnaire. 3.1 Variable Voting Rights Frey s proposals on voting rights with variable weights can be straightforwardly applied to the Dutch situation. Clear majorities reject the idea (71% against, in favor: 23%) of granting non-nationals voting rights that are increasing with the number of years they have permanently lived in the country and the idea (82% against, in favor: 15%) to let commuters have half a vote in both the communities where they live and work. We find, on the other hand, a small-majority support (52% in favor, against: 42%) for the proposal to let emigrated nationals progressively lose their voting rights in their country of origin. Finally, a vast majority rejects the idea to give people older than 70 years twice as much influence when there is a vote on the future rules of decision-making, by making changes in the constitution (94% against, in favor: 4%). 3.2 Democracy in New Areas We apply the reforms introducing democracy in new areas to the Dutch institutional setting as follows. The first proposed reform is to extend direct participation rights to spheres beyond politics, in particular firms (and other organizations). In Dutch firms, there is already a form of representative representation of employees in the Works Council (Ondernemingsraad). In these councils, elected representatives of employees, among other activities, vote on proposals made by the employer (in some cases, if the representatives vote against a proposal the decision has to be delayed or the employer has to go to court to implement it). In the questionnaire, we ask whether individuals want to have referendums in which employees instead of the Work Council members can vote. A majority of the individuals (57% against, in favor: 37%) rejects such a proposal. The second of Frey s proposals is to extend direct participation rights to functional political units to overcome technocratic regimes. An example of a Dutch Functional Overlapping Competing Jurisdiction (FOCJ, see Frey and Eichenberger 1999) is the socalled Water Board (Waterschap). The function to be fulfilled by a Water Board is the management of water (sewage, waterways, water barriers, water quality, etc.). Water

8 Homo Oecon (2018) 35: Boards are overlapping with, for example, the Dutch local governments (gemeentes) and competing in a Tiebout (1956) voting-with-your-feet sense. It are jurisdictions with the authority to impose taxes (e.g., the inhabitants tax ingezetenenomslag ), and Water Boards are largely technocratic regimes, with some representatives in its management board elected by its inhabitants while other representatives are delegates of, e.g., farmers located in the area. It is thus apt to test the electorate s support for the second of Frey s reforms by proposing the introduction of decision-making by referendum in these Water Boards. It turns out that a clear majority of the respondents of our questionnaire (65% against, in favor: 25%) rejects such a reform. Additionally, Frey s Switzerland-inspired desideratum of direct participation of people (Frey 2017, p. 2) does not perfectly connect to the Dutch system of representative democracy. In fact, in the same period as we were working on this project a new coalition government was formed after national elections. In the coalition agreement, it is written that the only component of direct democracy at the national level, a non-binding consultative referendum, will be abolished in the current legislature. We therefore include a question whether this referendum should indeed be abolished. The proposal is supported by a large majority (65% in favor, against: 32%). 3.3 Close Majorities in Referendums The proposal on a constitutionally sanctioned procedure to reach consensus when the outcome of a popular referendum is close, has some similarities with the non-binding consultative Dutch referendum: if a majority in the population rejects the proposal, the national government and parliament have to restart the debate on the issue. A small majority of the respondents, however, opposes the introduction of a consensus-finding procedure when the majority in the referendum is smaller than 55% (51% against, in favor: 34%). 3.4 Introducing Randomness The first proposal to introduce randomness in decision-making is to determine the outcome of a referendum by a lottery with the weights given by the votes shares in that referendum; the second to elect 50 out of 150 seats of the Dutch Parliament not by elections but, instead, by a random draw from the Dutch electorate. Both proposals to introduce random decisions in the decision-making process are rejected by vast majorities (89% against, in favor: 5% for random referendum outcomes; 77% against, in favor: 18% for aleatoric democracy). 4 Conclusion We analyze Frey s nine proposals to reform democracy from the positive perspective and validate this theoretical discussion with a questionnaire directed at the Dutch situation. Direct democracy does not find majority support among the Dutch electorate. Suggested reasons are rational ignorance; another that elements of direct

9 140 Homo Oecon (2018) 35: democracy is seen as not fitting well in the representative-democracy institutional setting in the Netherlands, 8 or that a binding referendum is preferred over a nonbinding one. Indeed, a large majority of the respondents of the questionnaire is in favor of abolishing the non-binding consultative referendum (the only example of direct democracy at the national level in the Netherlands). As already mentioned by Tridimas (2017) on the proposal of introducing random selection of representatives an institution [like a referendum that served the Swiss system well] may not be easily transferable to a representative democracy without the rest of the institutional structures. 9 In line with this, we argue that neither a rational self-interested individual supports the introduction of aleatoric democracy nor do we find support in our survey for doing so. Frey s reforms are thus to a large extent system-specific and most applicable in the Swiss system. 10 This specificity relates to a possibility for further research: to measure popular support for Frey s Switzerland-inspired proposal in a representative Swiss sample. Together, these observations point at a first general conclusion: when making proposals to reform democracy, one has to consider the already existing institutions. A second general conclusion is that when making proposals to reform democracy based on the Public Choice approach, one has to explicitly take into account whether the rational self-interested individuals prominent in this approach actually support them. Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License ( iveco mmons.org/licen ses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. References Brouwer, P. & Staal, K. (2017). De democratie van de toekomst. Google Forms https ://docs.googl e.com/ forms /d/1l2sv LbcPG -3Wk6m dnqsp MUQmD zplmx gsfcd FI4gV 4ZA/. CBS. (2017). Population key figures. ine.cbs.nl/statw eb/dome/?la=en. Dowding, K. (2017). Developing Democracy. Comment on Proposals for a Democracy of the Future by Bruno Frey. Homo Oeconomicus, 34(2 3), Downs, A. (1957). An economic theory of democracy. New York: Harper & Brothers. Fox, S., & Johnston, R. (2017). Well-Intentioned Fantasy? A Comment on Proposals for a Democracy of the Future by Bruno Frey. Homo Oeconomicus, 34(2 3), Frey, B. S. (2017). Proposals for a democracy of the future. Homo Oeconomicus, 34(1), 1 9. Frey, B. S., & Eichenberger, R. (1999). The new democratic federalism for Europe. Functional, overlapping and competing jurisdictions. Northampton: Edward Elgar. Kantorowicz, J. (2017). Democracy of the future: Comment on Proposals for a Democracy of the Future by Bruno Frey. Homo Oeconomicus, 34(2 3), Kendall, R. (2017). Aligning democracy: A Comment on Bruno S. Frey s Proposals for a Democracy of the Future. Homo Oeconomicus, 34(2 3), Kirchgässner, G. (2015). Direct democracy, changes and challenges. CREMA Working Paper No Several respondents have made such comments, either by or at the end of the questionnaire. 9 Note that also the contributions cited by Frey in support for direct democracy (Kirchgässner et al. 1999; Kirchgässner and Feld 2000; Kirchgässner 2015) are indeed heavily focused on Switzerland. 10 Based on another argumentation, Schofield (2017) comes to a similar conclusion.

10 Homo Oecon (2018) 35: Kirchgässner, G., & Feld, L. P. (2000). Direct democracy, political culture and the outcome of economic policy: A report on the Swiss experience. European Journal of Political Economy, 16(2), Kirchgässner, G., Feld, L.P., & Savioz, M.R. (1999). Die Direkte Demokratie. Modern, Erfolgreich, Entwicklungs- und Exportfähig. Helbing and Lichtenhahn/Vahlen: Basel and Munich. May, K. O. (1952). A set of independent necessary and sufficient conditions for simple majority decisions. Econometrica, 20(4), Nurmi, H. (2017). Reforming democracy: Comment on Proposals for a Democracy of the Future by Bruno Frey. Homo Oeconomicus, 34(2 3), Schofield, N. (2017). Comment on Proposals for a Democracy of the Future by Bruno Frey. Homo Oeconomicus, 34(2 3), Tiebout, C. (1956). A pure theory of local expenditures. Journal of Political Economy, 64(5), Tridimas, G. (2017). On sortition. Comment on Proposals for a Democracy of the Future by Bruno Frey. Homo Oeconomicus. https ://doi.org/ /s van de Pol, J., Holleman, B., Kamoen, N., Krouwel, A., & de Vreese, C. (2014). Beyond young, highly educated males: A typology of VAA users. Journal of Information Technology & Politics, 11(4),