Legislative Decision Making

Abstract

How many individuals must agree before a collective decision is imposed on a community? Buchanan and Tullock (1962) raised that question roughly fifty years ago and answered that it depends on how a community weighs decision costs and external costs. At the constitutional stage decision costs are less consequential. Hence, voting rules that produce Pareto superior and Pareto optimal outcomes (or just Pareto optimal outcomes) should be promoted. The only voting rule that could guarantee such results, and minimize external costs, is unanimity rule. At the legislative stage, the optimal k-majority rule may depend on both external costs and decision costs. With decision costs considered, the sum of decision costs and external costs might be minimized closer to majority rule.