Abstract
Reflection on the role and governance of a democratically-organized state can start at various levels. At the most fundamental level, founding principles such as the monopoly of coercion of the state, the power to levy taxes, the validation of property rights and of contracts between citizens, or equal voting and agenda-setting rights, the basic right to be a candidate for office, and the separation of the legislative, judicial and executive powers are the basis of governmental authority. At the next level, we find the definition of roles and of governmental activities such as the appointment of office-holders and the procedures for provision of services and public goods. We will focus on this second level, taking the founding governmental principles as given, but may allow democratically-founded modifications of voting rights over the course of a decision-taking process.
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Notes
- 1.
Explicit contractual incompleteness for the design of optimal majority rules and the role of vested interests ex-post have been developed by Aghion and Bolton (2003).
- 2.
An example of treatment rules is the requirement that citizens with the same income have to pay the same income tax.
- 3.
See Jackson (2001), Mailath and Postlewaite (1990), Güth and Hellwig (1986), and Hellwig (2003). In contrast, there exist mechanisms that are interim individually rational, approximately efficient, and budget-balanced in large societies in private-goods settings. For an excellent and unified treatment of the theory of mechanism design, see Börgers (2015).
- 4.
- 5.
This right can be delegated to representatives in parliament.
- 6.
- 7.
The limitations of such Democratic Mechanisms with regard to the dimension of uncertainty—and with regard to uncertainty about the size of the utility losses—is dealt with in Gersbach (2011).
- 8.
A first version of this chapter has appeared as Gersbach (2009c).
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Gersbach, H. (2017). Introduction to Part II. In: Redesigning Democracy. Springer, Cham. https://doi.org/10.1007/978-3-319-53405-3_7
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