Constitutional Design and Political Communication Dimitrios Xefteris International Doctorate in Economic Analysis Universitat Autònoma de Barcelona December 13, 2008 Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 1 / 16
The Topic What is the level of Democracy that a society prefers? Democracy: (Etymological de nition) Decision rule by which the society has the decision making power Is the level of Political Communication relevant? Political Communication: (Habermas) Level of information that citizens hold about social preferences Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 2 / 16
Preview of Results Unless the level of political communication is "unrealistically" high, societies shall never demand the highest possible level of democracy The level of democracy demanded by a society is increasing in the level of political communication Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 3 / 16
The Theoretical Environment (J.Locke) / The Constitution Two clearly separated entities: Authority and Society Formal power is assigned to the Authority Real power is distributed to both entities The constitution de nes the distribution of the real power between the Authority and the Society How much real power is the society willing to accord to the authority? Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 4 / 16
The Model Delegation Model (Continuum of Principals - One Agent) Policy space [0, 1] Continuum of individuals distributed in [0, 1] according to F (i) The utility of an individual i is given by : u i (b) = jb ij, i 2 [0, 1] The authority s utility function is given by: u r (b) = jb rj, r 2 [0, 1] Note: Social utility (u F (i) (b) = accordance to the median voter s utility 1 R 0 jb ijdf (i)) behaves in Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 5 / 16
The Model The Constitution (Real Power of the Authority-Agent) A constitution x j 2 Ω is such that, x j = [s j 1 (m), sj 2 (m)] [0, 1] s j 1 (m) = m εj 1, sj 2 (m) = m + εj 2, where εj 1 2 [0, 1] and εj 2 2 [0, 1] Ω = fx j = [s j 1 (m), sj 2 (m)]j s.t. sj 1 (m) = m εj 1, sj 2 (m) = m + εj 2, 8 ε j 1 2 [0, 1] and 8 εj 2 2 [0, 1]g The level of democracy of a constitution x j is a decreasing function of ε j 1 and εj 2 Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 6 / 16
Level of Democracy (Dictatorship - Intermediate Constitutions - Direct Democracy) Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 7 / 16
The Game 1st stage: A constitution x 2 Ω is selected by the society (Condorcet winner constitution) 2nd stage: The authority takes a decision b (r, x ) 3rd stage: Welfare of individuals is computed Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 8 / 16
Informational Elements To form a preference ordering over Ω each individual needs information about the Authority s preferences (r) and the Society s preferences (m) We assume that information about r is perfect and information about m is given by Φ(m 0 ) Information about m may be imperfect but not fallacious. That is E (m 0 ) = m The level of political communication is a decreasing function of the dispersion of m 0, [P(Φ(m 0 )) = MD(m 0 )] Political communication is considered to be quasi-perfect if and only if individuals know with certainty in which side of r, m lies Each individual i computes Eu i (b (r, x j )) = 1 R 0 ji b (r, x j )jdφ(m 0 ) for every x j 2 Ω Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 9 / 16
Results Preliminary Result 1: A Condorcet winner constitution x 2 Ω always exists and it is the one preferred by the median voter Result 2: There, generically, exist a measure of individuals that prefer dictatorship to direct democracy Result 3: When the level of political communication is not perfect, there are values of r for which, dictatorship is socially preferred to direct democracy Result 4: The measure of socially preferred dictatorships is decreasing in the level of political communication Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 10 / 16
Results Preliminary (Direct Democracy vs Dictatorship) Eu m (b (r, x m )) = E jm m 0 j = E je (m 0 ) m 0 j = MD(m 0 ) = P(Φ(m 0 )) Eu m (b (r, x r )) = jm rj Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 11 / 16
Results Main (Condorcet winner Constitution) Result 5: If political communication is "quasi-perfect", then the Condorcet winner constitution is direct democracy. On the contrary, if political communication is "non quasi-perfect", then the Condorcet winner constitution is neither direct democracy nor dictatorship Result 6: If political communication is "non quasi-perfect", and Φ(m 0 ) uniform in [α, β] [0, 1] then the level of democracy of the Condorcet winner constitution is increasing in the level of political communication Result 7: If political communication is "non quasi-perfect", and Φ(m 0 ) uniform in [α, β] [0, 1] then the level of democracy of the Condorcet winner constitution is increasing the "extremism" of the authority s policy preferences ε 1 = ε 2 = jm rj 2P(Φ(m0 )) Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 12 / 16
Results Main (Condorcet winner Constitution) Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 13 / 16
Discussion Contribution Democracy is impossible (Arrow (1964)), involves severe participation costs, involves severe deliberation costs (Aghion, Alesina, Trebbi (2004)), does not necessarily maximize social welfare Here we have created a framework in which democracy is possible, incurs no participation & deliberation costs, and maximizes social welfare The highest-level of democracy is still hardly ever chosen by the society Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 14 / 16
Concluding Remarks "Video meliora proboque deteriora sequor", Ovid, Metamorphoses, VII 20 Political Communication is necessary for a society to behave consequently with its entity characteristic, in the sense that, only by exhibiting quasi-perfect political communication its ex-ante preferred constitution coincides with the ex-post optimal one (Direct Democracy) Individualism is not to be blamed alone for the absence of democratic institutions As European integration evolves, the consequent increasing level of political communication among citizens results in an increasing criticism of the "democratic de cit" of the E.U. institutions (Habermas) Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 15 / 16
Thank You... Dimitrios Xefteris (XXXIII S.A.E.) Const. Design & Political Communication December 13, 2008 16 / 16