Risk & Progress| A hub for essays that explore risk, human progress, and your potential. My mission is to educate, inspire, and invest in concepts that promote a better future for all. Subscriptions and new essays are free and always will be. Paid subscribers gain access to the full archives.
When the time comes for Martian colonists to set up a government for themselves, what kind will they choose? Will they learn from terrestrial trial and error? In prior essays, I looked at some of the challenges facing Western-style democracy in the 21st Century and while it has, for the most part, served us well, it is time for us to consider better and more effective approaches to governance. Thus, a thought experiment; if we could begin from a clean slate on Mars, how would best design a government there?
Parliamentary or Presidential?
One of the recurring themes that frame many discussions surrounding institutional design is the debate between parliamentary and presidential governments. In a prior essay, I noted that the latter splits democratic legitimacy between the executive and legislative branches and that this fragmentation can create a kind of straightjacket on policymaking. This begs the question though, is there any empirical evidence that parliamentary systems, where the executive branch is fused with the legislative, is a superior approach worthy of Martian colonists?
We now have enough data on democracy to be able to answer this question. Researchers John Gerring, Strom Thacker, and Carola Moreno, looked at 14 key performance indicators that gauge government effectiveness across three broad areas; political development, economic development, and human development. They gathered data from countries around the world, controlling for confounding variables that might skew the results. They then compared nations with presidential systems to those with parliamentary systems of government. The results are intriguing and worthy of discussion.
Parliamentarism appears associated with better political development, though the relationship is not very robust in some areas. Parliaments also foster more effective bureaucracies and institutions. This corresponds with my prior thesis that presidential governments create a fracture in legitimacy that can ‘hollow out’ the functions of the state. But it is in economics that parliamentarism shines; it is associated with better infrastructure, lower tariffs, lower trade barriers, and a higher GDP per capita. Parliamentarism is also associated with lower levels of infant mortality, longer life expectancies, and other KPIs for general human development. Some research suggests that presidential governments are also less fiscally disciplined; the inherent fragmentation makes it harder to gain consensus, thus bills need to be packed with more “pork” for holdout politicians.
The research concludes that while parliamentarianism doesn’t guarantee better governance in all instances, it does appear to do no harm relative to a presidential one. Nonetheless, in some crucial areas, the data suggests that parliamentary systems outperform their presidential cousins. The researchers conclude that since government is a means of solving coordination problems between individuals and society, parliamentary systems provide a more unified and straightforward means to achieving this. Our Martian colonists would probably, therefore, be better off adopting a parliament of their own.
It should not be surprising then that Denmark, considered the ‘gold standard’ for effective governance, has a unicameral parliamentary system; a single point where the problems of coordination are hashed out. Denmark also features proportional representation (PR) in its parliament, where the number of seats allocated reflects the proportion of people who voted for that particular party. This stands in contrast to America’s plurality voting system, where candidates compete for office in winner-take-all districts. With PR, more people have their voices represented and PR also functionally eliminates the possibility of gerrymandering, where incumbent officials redraw their districts to choose the voters (instead of vice versa).
Less or More Democracy?
Perhaps though, the problems facing democracy are not merely of coordination and aggregation of the will of the people, maybe we also have a problem of too much democracy. This is the argument made by Garett Jones in his book, 10 Percent Less Democracy. He makes the case that there is an ‘optimal’ amount of democracy; too little of it can be just as problematic as too much. He presents some compelling data and examples to illustrate this point. For example, he notes that elected officials behave differently when they are up for reelection. Senators in America, for instance, tend to support counterproductive protectionist policies in the last two years of their term, when they know the public is watching them closely.
Jones adds that some roles of government require making tough and unpopular decisions; those appear best left to officials who are not under direct public pressure. Central bankers, for example, have the unenviable task of controlling the money supply to balance the business cycle; often requiring unpopular interest rate hikes. The data shows that independent central bankers average 4 percent lower inflation, yet maintain about the same unemployment and economic growth rates as captive bankers. New Zealand is a natural experiment here. In 1989, it had among the least independent central bank, it also had a stubborn inflation problem that averaged 10 percent per year. Within two years of giving its central bank independence, inflation fell to just 1 percent and has averaged around 2 percent annually ever since.
Jones highlights a similar advantage with unelected city treasurers. Alexander Whalley of the University of Calgary examined the interest rate on debt issued by cities between elected and appointed city treasurers. Interest rates are a good indicator of financial health; high rates mean lenders feel less confident in lending to you. He finds that cities with elected treasurers tend to pay higher interest rates than those with appointed experts; over half a percent higher on average. Over time, half a percent amounts to significant savings for cities that utilize appointed experts. In addition, studies have found that regulators who are not dependent on government funding, that is, those who can self-fund through fees, tend to function more effectively.
Jones argues that highly technical exercises are best left to the experts, not the elected officials. Take tax policy, for instance, the US has a highly convoluted tax code that runs thousands of pages in length. Part of the reason for this complexity is that elected officials had to fill it with loopholes, carve-outs, exemptions, and deductions for their donors and constituents. The result is a tax code exacerbates wealth inequality and depresses growth. We would all be better off if we allowed the experts to draft these rules free of outside interference. Jones proposes the creation of a “Federal Tax Board” comprised of economists and experts to write the law instead. Congress’s role would be to draft a charter of general aims, and the experts would find the best way to implement them.
Jones also makes the intriguing suggestion that we ought to allow government bondholders a voice in policymaking. It is important to remember that government debt is not always a bad thing. Governments sell bonds (debt) to investors to fund their operations. If worker productivity is rising 1 percent a year, it makes sense to borrow against the future to live better now, knowing that there will be a higher “income” later on it pay it back. Governments that cannot raise productivity or who spend beyond their means will inevitably default on their debt. This will be either a “hard default” where bondholders will take formal written losses, or its (ironically) worse cousin, a “soft default.” In a soft default, the debt is paid by printing worthless currency, inflating the debt away. Bondholders are not fooled by either.
Those who lend to a government, from banks to individual investors, have a keen interest in its long-term economic and financial performance. Arguably, bondholders think longer term and have better information than the public does about how well that government is functioning and how a particular new policy might impact its future performance. Thus, the price and yield of a bond, like the value of a share in a company, is incredibly valuable information about the health of a nation as a whole. It would be beneficial for everyone to give bondholders some voice in how day-to-day matters are run.
Jones acknowledges the role and importance of democratically elected representatives, who typically sit in the “lower house” of a legislature but suggests that they should be balanced by an upper house of “wisdom,” which he calls the Sapientum. This upper house would require substantially higher levels of education to join and may allocate some seats to bondholders who hold the nation’s debt. The goal, he says, is still democracy, just 50 percent less of it.
While Denmark is held up as the ‘gold standard’ for good governance by most, Jones says we should instead look to Singapore. Singapore is a semi-democracy with a strong rule of law and an independent judiciary. Singapore’s flourishing has been breathtaking. It went from a relatively poor backwater in 1960, to having a longer life expectancy, and an 80 percent higher GDP per capita than Denmark itself.
Open Democracy
On the other hand, Helen Landemore comes to the opposite conclusion in her book, Open Democracy; the problems of modern democracy are not too much of it, but too little. The process of selecting candidates through the filters of parties, fundraising, and campaigning, has created an “enclosure of power” around wealthy and connected elites that is better described as a system of “elected oligarchies.” She argues that a true democracy would maximize representation through cognitive diversity and the best way to achieve this is to remove those filters and return to sortition.
Sortition, where individuals are randomly selected for office, has its merits. We could build parliaments or, as she suggests, many “mini-publics” that are more representative and reflective of the people. Because the officeholders would rotate frequently, would not need to campaign or fundraise, and would lack party affiliation, they would be much harder to influence by special interest groups.
Direct democracy through sortition, she hopes, would result in a truly “Epistemic democracy” that gives the people the power to set the agenda and directly deliberate with one other. Presumably, an open democracy would be more stable; polarization would ease as opposing political views would have to share the room with each other, not only the adjacent ballot box. Further, instead of wasting hours demonstrating and protesting, that time could be used assembling a platform at a “mini-public.”
Are They Both Right?
What does this mean for our Martian colony? At first glance, it appears that Landemore and Jones disagree. After all, one is calling for more democracy, the other for less. But I do not view their thinking as mutually exclusive. They both agree that influence from special interest groups is corrosive and often leads to poor policymaking. Landemore promotes open and direct democracy but is careful to note that this does not mean that experts have no role to play, she recommends that experts serve in an advisory capacity. Jones, of course, also calls for an “upper” house of wisdom, which plays a similar advisory role
Perhaps the ideal government fuses more democracy with less; a parliamentary legislature where representatives are selected via sortition and have the power to set the agenda, deliberate, and pass “charters” with the advice and expertise of an upper house of wisdom. Borrowing a page from Jones, perhaps the upper house, can be filled with bondholders and other experts who have a long-term stake in the financial, economic, and political health of the nation. The goal of the legislature is to maximize cognitive diversity and make sound decisions. Once those decisions are made, the executive is tasked with hashing out the fine details and effectively implementing them; enforced by semi-independent, highly compensated staffers. As I discussed here, this minimizes incentives for graft and draws expertise that might otherwise have remained in the private sector.
Finally, I have long been a critic of unidirectional government; governments appear only capable of creating new laws and regulations and are poorly equipped to remove or edit older ones. Thus, I also envision a third branch, very loosely modeled after the Nomothetai in ancient Athens, which was tasked with reviewing and editing law. Via this third branch, anyone could challenge an existing law, take it before a ‘court’ of appointed experts and laymen, and make their case as to why it should be abolished or revised. The third branch could make the changes itself or punt it back to the legislature with recommendations. It might even use data acquired from ‘pilot zones’ to advise these recommendations. This helps prevent the gradual buildup of “non-functional” laws and regulations that, stifle growth and prosperity.
We can only hope that the framers of our Martian colonial government learn from the trials and errors made here on Earth. Lucky for them, we now have decades of experimental data to work with. Building a ‘protopian’ society requires that we take a hard look at ourselves and ask, “What is working and what is not?” With the courage to ask these questions and the wisdom to find the answers, we can begin the task of building a better and more prosperous future.
You may also like…
Funny you mention Landemore, for one of her political science classes at Yale she and her students wrote a constitution for a Mars colony as an illustration of how her Open Democracy ideas might be practically implemented. https://drive.proton.me/urls/X989G6MFP8#9I7DgmtF2ae7
Good piece. Three questions:
1) If martian citizens thrive and reproduce in large numbers, should governing units be shrunk to city state size to maximize the "laboratories of democracy" aspect of policy making? Have you read Ober's The Rise and Fall of Classical Greece? He makes some fascinating points about Greek city state GDP growing faster than it had in history, and the high living standards in Greek cities. That topped out at the Roman conquest, and began to shrink thereafter, until Greece was quite poor under the Byzantines.
2) What of Switzerland (small population, moderate-sized country) with its direct democracy? It seem to function way better than I'd suspect. Is this because it's so small? Could a large state function with some version of their governing structure?
3) Is there an argument to be made for the impairment of the legislative process? America turns like a bloated cruise ship — slowly, and only after great effort. But yet America does surprisingly well in many regards. America gets plenty wrong, but because it's so hard to make changes, stupid choices are avoided that would have otherwise strangled GDP growth and other positives.