Robert E. Bohrer II - Decision Costs and Democracy: Trade-offs in Institutional Design

In Churchills time, democracies were relatively scarce. As Britain stood alone against the Nazi onslaught, Europe was under the thumb of totalitarian rule and one of the handful of remaining democracies, the United States, clung to neutrality. In the aftermath of World War II the southern part of Europe remained in flux and under authoritarianism. In the east, communist takeovers were ending any chance of self-determination in that region. Since Churchills time, things have changed dramatically with transitions to democracy occurring on every continent. In places where democracy would have seemed unthinkable fifty years ago countries such as Spain, Poland, Malawi, and Mongolia democratic institutions are operating.

When discussing different forms of government, one tends to think in general terms such as democratic, authoritarian, or totalitarian systems. While these are certainly important distinctions, within each of these categories there are many varieties. For example, the relatively popular and benign kingdom of Jordan is an authoritarian system but so was the repressive rule of Idi Amin in Uganda. By terming both of these systems as simply authoritarian we are unable to distinguish some very meaningful differences. In short, these categories are so broad as to provide only very general distinctions. When comparing democracies to other types of government, Churchill is tapping into a very important distinction, but among democratic systems there are profound differences. For example, the Italian system is well known for its instability and average government duration of around ten months in the post-war era. In addition, the fact that France has experienced revolution, several emperors and five republics since the passage of the American constitution shows a volatile past. By delving into variations within the category of democracy, we should be able to identify and classify these differences. Moreover, these variations are likely not all cosmetic they should matter.

This book addresses the variations in democratic institutional design and seeks to determine not only if these differences matter, but also to explain how they matter. Using data from established, economically well-off systems we see that not only are there a multitude of ways to construct a democracy but also that how a democracy is constructed influences the outcomes produced by that system. In other words, institutional differences create distinct incentives for behavior that in turn influence the type of outcome produced. An example from the experience of the United States helps clarify this point.