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Let's look at the theory
of the median voter,
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one stylized account of
democratic decisionmaking.
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In general, the evidence suggests
that democracies give us
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better economic policy
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and definitely better
human rights records.
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See the video on democratic
evidence for more on this topic.
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But still, economists do not
usually romanticize democracy.
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It's another decisionmaking process,
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and it actually has a lot of
imperfections and flaws.
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Let's look at that more closely.
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Consider a simple model of
what is sometimes called,
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one-dimensional politics.
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One-dimensional politics means
you can arrange people's views on a line,
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where here is say the left-wing,
and here is the right-wing,
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and here are individuals in the center,
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and anyone's views fall
somewhere on this line,
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extreme left, center, or on the right.
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The people on the left-wing agree with
eachother about pretty much everything:
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economics, foreign policy, civil liberties,
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as do the people on the right-wing
or the people in the center.
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So there is one kind of general
dimension of tug of war in society
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under this assumption and furthermore,
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a particular seat in
the legislature is winner-take-all.
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If you get one more vote,
well, that seat is yours.
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Those are the key assumptions here.
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They don't literally describe
any single, real-world country,
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but this is just a way of
building an abstract model,
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so we can get a general sense of
how electoral pressures operate.
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Now, let's consider
the median voter theorem.
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The median voter is the voter
in the middle or the most centrist voter,
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or you could say in a way,
the most typical voter in society.
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And here, imagine you have
a normal distribution of voters
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with a lot of individuals
clustered here in the center,
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a smaller number with more
extreme left-wing views,
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and a smaller number with
more extreme right-wing views.
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Furthermore, now imagine
you have two parties competing
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for the loyalty of this electorate.
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A given voter will stand
somewhere on this line, say here,
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and that voter, by assumption,
will choose the party
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which is closest to
his or her point of view.
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So if you're a voter here
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and two of the other parties
are here and here,
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well, you're going to vote for
this party here in the center.
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That leads to competitive
pressures for both parties
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to move very close to the center
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and locate themselves at
or near the center,
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because if you're a party and
you move away from the center,
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well, you're losing some votes
from at or near the center
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and the people you're moving closer to
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on the extreme right or
left sides of the distribution,
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well, they were gonna vote for you anyway.
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The vote maximizing thing to do
with competition across parties,
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free and fair competition, is
to locate at or near the center.
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Again, no one is saying
this is literally true,
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there may be real-world forces,
which move you a bit away from the center,
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such as the need to win a party primary
or the need to raise funds from donors.
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But still in any system where
there's actual real voting,
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to consistently win
or contend for elections,
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what you need to do
is have points of view,
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which are not so far away
from most of the voters.
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What are some possible advantages
of having something
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that operates a bit like
the median voter model?
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Well, for one thing,
you get centrist politics,
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of course, people who are not at the center
don't think that's an advantage.
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Perhaps most importantly,
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you manage to get rid
of the very worst rulers.
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Whatever the imperfections
of democracy may be,
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if there's a truly terrible
ruler or leader,
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that person can and indeed
probably will be voted out of office.
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And most generally, you have vigorous
competition between the two parties.
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so they monitor each other,
and they hold each other accountable
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and they uncover information when
the other party does something wrong.
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What are the possible disadvantages?
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Well, in a median voter model,
virtually all voters are not decisive,
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that is, their vote doesn't matter.
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It's that one voter or very small number
of voters right at the center
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who are deciding who wins.
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And if most voters are not decisive,
how much time, effort, intelligence,
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information, will they put into
learning about politics?
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Very often not that much.
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And you have a large number of voters
who adhere to many economic fallacies,
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or they hold views called
"feel good" views,
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just to feel good about themselves,
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whether or not that view
would be effective in practice.
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And to often an astonishing degree,
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voters remain uninformed
or underinformed in democracy.
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Those are really some major flaws.
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Again, we're not saying that
autocracy or dictatorship does better.
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What we are saying is we need
to have a realistic sense
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of what democracy can and cannot achieve.
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Some particular biases of voters have
been studied by our colleague,
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Bryan Caplan.
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And Caplan, using survey evidence
from the United States,
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lists a few of these biases.
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One is what he calls make-work bias,
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which is just focus on whether
jobs are being created
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and not on whether those jobs
are producing useful output.
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Another is anti-foreigner bias,
very common in democracies.
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Pessimism-bias,
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people think economic conditions are
worse or worsening than they really are,
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and also anti-market bias.
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When it comes to understanding,
say, the benefits of trade,
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or the problems with price controls,
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people don't really understand
as much as professional economists do,
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and furthermore, they often make
mistakes in an anti-market direction.
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The particular mistakes often depend
upon the country under consideration,
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but you'll find a lot of biases
like these around the world,
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and not just in the United States.
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Two more potential
disadvantages of democracy,
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at least from some points of view.
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The first is that voters
far from the center;
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they often feel unrepresented
or uninvolved
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because it's the center
that's winning all the time.
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Again, that doesn't have
to be a bad thing,
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but it's often believed that
a parliament or congress would be better
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if there could be more
diversity of represented views.
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So toward that end, a lot of democracies
have moved to a form called
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proportional representation,
which is different from winner-takes-all.
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Let's take a look at that.
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Proportional representation hands out
seats, say in parliament,
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on the basis of the percentage
of the votes won.
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So to give one very simple formula,
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imagine if you get 40% of the votes,
you get 40 seats,
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30% of the votes, you get 30 seats,
20%, you get 20 seats,
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10% of the vote, you get 10 seats.
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It doesn't have to work
that simply or exactly,
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it's just an example.
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Under proportional representation,
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you then have parties form
a coalition to rule.
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So you could imagine
the lead party with 40
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and the other party
with 20 teaming up,
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and they would have 60,
that would be a majority.
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There will be greater diversity of
opinion expressed in parliament,
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and you can say that the process
is more representative
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and some of the people
a bit closer to the extremes
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will find their views
represented in parliament.
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But still, the final outcomes
don't have to be either better
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or necessarily more representative.
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Because in the case of
this coalition, for instance,
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you have the party that won 40,
getting its way on most things.
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And then to create the coalition,
the party that won 20,
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well, they'll give that party
its way on a few issues,
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and you still have, you know,
partial rule by the 40%
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and partial rule by the 20%,
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that may or may not be better
than the median voter theorem.
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We can say that
proportional representation
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is a more popular form of
democracy in today's world.
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But when you look at the key flaws
and problems with democracy,
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namely its informational flaws,
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proportional representation has
pretty much the same problems
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as the winner-take-all
median voter systems.
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This is a big topic and
we've just scratched the surface.
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Here are some terms
you could google.
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There are also two very good
classic books you could read,
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Anthony Downs,
Economic Theory of Democracy,
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and Bryan Caplan,
The Myth of the Rational Voter.