An Economic Theory of Democracy
Encyclopedia
An Economic Theory of Democracy is a political science
treatise written by Anthony Downs
, published in 1957. The book set forth a model with precise conditions under which economic theory could be applied to non-market
political decision-making. It also suggested areas of empirical
research that could be tested to confirm the validity of his conclusions in the model. Much of this off-shoot research eventually became integrated into the Public Choice School. Downs' theory abstains from making normative
statements about public policy
choices and instead focuses on what is rational
, given the relevant incentives, for government
to do.
is central to his theory. Depending on the ideological distribution of voters in a given political community
, electoral
outcomes can be stable and peaceful or wildly varied and even result in violent revolution
. The likely number of political parties
can also be identified if one also considers the electoral structure. If the ideological positions of voters are displayed in the form of a graph
and if that graph shows a single peak, then a median
voter can be identified and in a representative democracy
, the choice of candidates and the choice of policies will gravitate toward the positions of the median voter. Conversely, if the graph of ideological distribution is double-peaked, indicating that most voters are either extremely liberal or extremely conservative, the tendency toward political consensus or political equilibrium is difficult to attain because legislator
s representing each mode are penalized by voters for attempting to achieve consensus with the other side by supporting policies representative of a middle position. Here is a list of the key propositions Downs attempts to prove in chapter eight:
The conditions under which his theory prevails are outlined in chapter two. Many of these conditions have been challenged by later scholarship. In anticipation of such criticism, Downs quotes Milton Friedman
in chapter two that: “Theoretical models should be tested primarily by the accuracy of their predictions rather than by the reality of their assumptions” (Friedman, 1953
).
Political science
Political Science is a social science discipline concerned with the study of the state, government and politics. Aristotle defined it as the study of the state. It deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior...
treatise written by Anthony Downs
Anthony Downs
Anthony Downs is a scholar in public policy and public administration, and since 1977 is a Senior Fellow at the Brookings Institution in Washington D.C..-Education:...
, published in 1957. The book set forth a model with precise conditions under which economic theory could be applied to non-market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
political decision-making. It also suggested areas of empirical
Empirical
The word empirical denotes information gained by means of observation or experimentation. Empirical data are data produced by an experiment or observation....
research that could be tested to confirm the validity of his conclusions in the model. Much of this off-shoot research eventually became integrated into the Public Choice School. Downs' theory abstains from making normative
Normative economics
Normative economics is that part of economics that expresses value judgments about economic fairness or what the economy ought to be like or what goals of public policy ought to be....
statements about public policy
Public policy
Public policy as government action is generally the principled guide to action taken by the administrative or executive branches of the state with regard to a class of issues in a manner consistent with law and institutional customs. In general, the foundation is the pertinent national and...
choices and instead focuses on what is rational
Rationality
In philosophy, rationality is the exercise of reason. It is the manner in which people derive conclusions when considering things deliberately. It also refers to the conformity of one's beliefs with one's reasons for belief, or with one's actions with one's reasons for action...
, given the relevant incentives, for government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
to do.
Contents
In chapter eight of the book Downs explains how the concept of ideologyIdeology
An ideology is a set of ideas that constitutes one's goals, expectations, and actions. An ideology can be thought of as a comprehensive vision, as a way of looking at things , as in common sense and several philosophical tendencies , or a set of ideas proposed by the dominant class of a society to...
is central to his theory. Depending on the ideological distribution of voters in a given political community
Community
The term community has two distinct meanings:*a group of interacting people, possibly living in close proximity, and often refers to a group that shares some common values, and is attributed with social cohesion within a shared geographical location, generally in social units larger than a household...
, electoral
Election
An election is a formal decision-making process by which a population chooses an individual to hold public office. Elections have been the usual mechanism by which modern representative democracy operates since the 17th century. Elections may fill offices in the legislature, sometimes in the...
outcomes can be stable and peaceful or wildly varied and even result in violent revolution
Revolution
A revolution is a fundamental change in power or organizational structures that takes place in a relatively short period of time.Aristotle described two types of political revolution:...
. The likely number of political parties
Political party
A political party is a political organization that typically seeks to influence government policy, usually by nominating their own candidates and trying to seat them in political office. Parties participate in electoral campaigns, educational outreach or protest actions...
can also be identified if one also considers the electoral structure. If the ideological positions of voters are displayed in the form of a graph
Graphics
Graphics are visual presentations on some surface, such as a wall, canvas, computer screen, paper, or stone to brand, inform, illustrate, or entertain. Examples are photographs, drawings, Line Art, graphs, diagrams, typography, numbers, symbols, geometric designs, maps, engineering drawings,or...
and if that graph shows a single peak, then a median
Median
In probability theory and statistics, a median is described as the numerical value separating the higher half of a sample, a population, or a probability distribution, from the lower half. The median of a finite list of numbers can be found by arranging all the observations from lowest value to...
voter can be identified and in a representative democracy
Representative democracy
Representative democracy is a form of government founded on the principle of elected individuals representing the people, as opposed to autocracy and direct democracy...
, the choice of candidates and the choice of policies will gravitate toward the positions of the median voter. Conversely, if the graph of ideological distribution is double-peaked, indicating that most voters are either extremely liberal or extremely conservative, the tendency toward political consensus or political equilibrium is difficult to attain because legislator
Legislator
A legislator is a person who writes and passes laws, especially someone who is a member of a legislature. Legislators are usually politicians and are often elected by the people...
s representing each mode are penalized by voters for attempting to achieve consensus with the other side by supporting policies representative of a middle position. Here is a list of the key propositions Downs attempts to prove in chapter eight:
- A two-party democracy cannot provide stable and effective governmentGovernmentGovernment refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
unless there is a large measure of ideological consensus among its citizens. - Parties in a two-party system deliberately change their platforms so that they resemble one another; whereas parties in a multi-party system try to remain as ideologically distinct from each other as possible.
- If the distribution of ideologies in a society’s citizenry remains constant, its political system will move toward a position of equilibrium in which the number of parties and their ideological positions are stable over time.
- New parties can be most successfully launched immediately after some significant change in the distribution of ideological views among eligible voters.
- In a two-party system, it is rational for each party to encourage voters to be irrational by making its platform vague and ambiguous.
The conditions under which his theory prevails are outlined in chapter two. Many of these conditions have been challenged by later scholarship. In anticipation of such criticism, Downs quotes Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
in chapter two that: “Theoretical models should be tested primarily by the accuracy of their predictions rather than by the reality of their assumptions” (Friedman, 1953
Essays in Positive Economics
Milton Friedman's book Essays in Positive Economics is a collection of earlier articles by the author with as its lead an original essay "The Methodology of Positive Economics," on which this article focuses.-The Methodology of Positive Economics:...
).
External links
- Downs: An economic theory of democracy. Article at WikiSummary.