«The Politician and the Judge: Accountability in Government Jean Tirole∗ Eric Maskin First version, April 2001 Revised, March 2004 Abstract We build ...»
The tyranny of the majority is an old theme of political thought. We have already quoted Madison on this point. In the Federalist Papers Alexander Hamilton proposed that the judiciary should control the encroachments and oppressions of the representative
body and that insulating it from accountability is important for this role:
If, then, the courts of justice are to be considered as the bulwarks of a limited Constitution against legislative encroachments, this consideration will aﬀord a strong argument for the permanent tenure of judicial oﬃces, since nothing will contribute so much as this to that independent spirit in the judges which must be essential to the faithful performance of so arduous a duty.
Still, despite the risks that RD poses for minority rights, we will suggest that it safeguards them better than direct democracy (recall Butler and Ranney (1994) on the pitfalls of democracy; see footnote 5).
We introduce a variant of the basic model in which there are two groups, the majority and the minority. To simplify the analysis, we assume that the majority knows that action a is its optimal choice. Similarly, the minority knows that action b is best for it.
What is not known is which action maximizes overall welfare. With probability x the majority should prevail, because action a imposes only a small negative externality on 25 the minority; let B 0 be the overall social beneﬁt of action a over action b in that case (we normalize social welfare under action b to be 0). With probability 1 − x, the minority should prevail: action a imposes a large externality on the minority and generates overall net loss L 0 relative to action b. B can be interpreted as the social loss when the minority blocks a socially desirable move, whereas L is the social loss from a move that oppresses the minority.
Finally, we assume that there are three types of oﬃcials: those who are congruent with the majority (labeled “M ”and having probability πM ); those who are congruent with the minority (labeled “m” and having probability π m ) ;and those who balance the two groups’ interests and so have preferences in line with social welfare ( labeled “W ” and having probability πW ). The preferences of the three types of oﬃcials are summarized in table 1.
Let us look at the welfare implications of our three benchmark institutions:
As one would expect, direct democracy fares better relative to judicial power when the loss from the externality is small (L small) or unlikely (x large), and when oﬃcials tend to be biased toward interest groups (π W low).
Representative democracy: The analysis of RD is similar to that of section III. Let us begin with the pandering case δ 1. In that case, even a W oﬃcial who knows that the minority should prevail prefers to cater to the majority in period 1. As in section III, RD delivers the same outcome as DD in period 1 and the same as JP in period 2. It is therefore dominated.
Next suppose that δ 1, so that there is no pandering. Action a is chosen by an M oﬃcial and, with probability x, by a W oﬃcial. Action b is selected by an M oﬃcial and, with probability 1 − x, by a W oﬃcial. Thus, the majority will not reelect an oﬃcial who has chosen b, and so representative democracy weeds out M and (less eﬀectively) W oﬃcials.
Proposition 3 For all δ (i) There exist thresholds x∗ and x∗∗ ( x∗ x∗∗ for δ 1, x∗ = x∗∗ for δ 1, where 0 x∗ ≤ x∗∗ 1) such that if x x∗, JP is optimal, if x∗ ≤ x ≤ x∗∗, RD is optimal, if x∗∗ x, DD is optimal, where x is the probability that the majority should prevail.
¡ ¢∗ ¡ ¢∗∗ ¡¡ B ¢∗ ¡ B ¢∗∗ ¢ (ii) Similarly, there exist thresholds B and B = L if δ 1 such that L L L ¡ B ¢∗ if B L, JP is optimal, L ¡ B ¢∗ B ¡ B ¢∗∗ if L ≤ L ≤ L, RD is optimal, ¡ ¢∗∗ B if B L, DD is optimal, L
W DD, W JP and W RD are increasing in x. W JP is the highest of the three for x = 0, W DD the highest for x = 1, and, for the value x such that W DD = W JP,
since w∗ wDD = wJP.
Thus, for low values of x or B/L, JP is optimal; these are the ranges for which minority rights are most important, and RD and DD lead to the majority-preferred decision too often. For moderate values of x or B/L, RD is optimal; RD is better than DD because it entails some chance that the decision will be taken by an m or W oﬃcial. But RD does not overweight these oﬃcials this bias like JP. Finally, for high values of x or B/L, DD is optimal (since, in this section, we assume away imperfect knowledge about the optimal action on the part of the electorate, we might as well let the majority decide directly if the minority stands to lose relatively little).
The Constitution as a decision allocating device Proposition 3 suggests a possible interpretation of the the U.S. Constitution. Let us suppose that x is rarely so high that DD is desirable. Then, it becomes desirable to distinguish between those cases in which x is (moderately) high (so that RD is optimal) and those in which x is low (JP is optimal).
The Constitution provides a means of making this distinction operational. If a decision bears on some Constitutional guarantee, this is a sign that x is low, i.e., that a minority’s rights are in jeopardy. And, indeed, the decision mechanism in such a case is to assign the decision to the Federal courts, the embodiment of judicial power. In the absence of a Constitutional issue, however, the presumption is that x is not especially low, and the policy decision remains in the realm of representative democracy.
28 VI. Summary and avenues for further research
The paper’s main ﬁndings can be summarized as follows:
(1) Accountability has two potential beneﬁts. It allows voters to remove oﬃcials whose interests appear to be noncongruent with the electorate, but also gives noncongruent oﬃcials some incentive to act as though they were congruent (through the eﬀect of forwardlooking or partial pandering).
(2) However accountability may encourage oﬃcials to pander to the electorate and overlook minority interests.
(3) Nonaccountability is most desirable when (a) the electorate is poorly informed about the optimal action, (b) acquiring decision-relevant information is costly, (c) feedback about the quality of decisons is slow. Therefore, technical decisions, in particular, may be best allocated to judges or appointed bureaucrats.
(4) The most important decisions should be taken by elected rather than nonaccountable oﬃcials (although direct democracy may have the edge over representative democracy for such decisions).
(5) The discretion of nonaccountable oﬃcials should be more limited than that of accountable ones.
(6) Nonaccountability is preferable when the majority’s preferences are very likely to inﬂict large negative externalities on the minority. However, representative democracy is better in this case than direct democracy, and, for moderate probabilities of negative externalities, may constitute a desirable compromise between the two extremes.
This paper is only a ﬁrst step in the analysis of how constitutional design aﬀects public choices. Many other issues of interest come to mind. First, extending the model to more than two periods would lead to a richer set of feasible institutions. For example, in a four-period model, the policy of giving an oﬃcial an initial tenure of two periods 29 and then making her mandate renewable by vote in each of the last two periods can be shown to make some sense. Second, the analysis could be extended to an international context; we could get at the idea that elected oﬃcials may have a harder time establishing credibility internationally (e.g., in arms talks or in negotiating with the IMF) because of their incentive to pander domestically. That is, pandering to multiple audiences may be diﬃcult. Third, we could study alternative nomination processes for judges and agency commissioners rather than maintain our current assumption that they are simply selected at random. Fourth, we could enrich the model to allow for the possibility that campaign contributions aﬀect politicians’ choices. Fifth, the model could be extended to allow elected oﬃcials to “pass the buck” by calling for a public referendum. Finally, some of our analysis might be applied to the media. People often read newspapers or watch television networks that conﬁrm their prejudices; in other words, the media pander in much the same way that politicians do.
We hope that these extensions and others will be pursued in future research.
30 Appendix We shall suppose that there is a small proportion ρ of oﬃcials with weak oﬃce-holding motives (so that they will choose actions in the ﬁrst period according to their true preferences). Call these the ideological oﬃcials. A proportion π of these are congruent; the remainder 1 − π are noncongruent.
Proposition A1 When δ 1 and q = 0, the unique pure-strategy perfect Bayesian equilibrium of RD in the limit when ρ → 0 is a pure pandering equilibrium in which the oﬃcial always chooses a in period 1 and is reelected if and only if she chooses a. The same conclusion holds for mixed-strategy equilibria if we impose the Markov requirement of footnote 21.
Throughout assume that ρ 0. Suppose, contrary to the proposition, Proof.
there is a pure-strategy equilibrium in which all types of nonideological oﬃcials choose b in period 1. Then the choice of a will lead the electorate to believe that the chooser is an ideological congruent oﬃcial with probability πp/ [πp + (1 − π) (1 − p)] π and so will reelect her. By contrast, the choice of b will lead the electorate to believe that the oﬃcial is noncongruent with probability exceeding 1 − π, and so will not reelect. Thus, nonideological type (C, a) cannot choose b in period 1 after all.
Suppose next that there exists a pure-strategy equilibrium in which some nonideological types choose a and others choose b. Then, for ρ suﬃciently small, the probability of an oﬃcial’s being congruent conditional on her choosing a in the ﬁrst period will either be strictly greater than π or strictly less than π. In the former case, an oﬃcial will be reelected if and only if she chose a, and in the latter if and only if she chose b. So, in either case, all nonideological oﬃcials will have the incentive to behave the same way (in order to get reelected), a contradiction. Thus the proposition is established for pure-strategy equilibria.
Next, allow for mixed strategy equilibria but impose the Markov requirement. Suppose that at least one type of nonideological oﬃcal chooses a with positive probability in equilibrium. Because δ 1 note that the (C, a) and (N, b) types have a stronger preference 31 for a over b than do the (C, b) and (N, a) types. Hence, in equilibrium, the former group chooses a with at least as high probability as the latter group. Furthermore, from the Markov assumption, the (C, a) and (N, b) types must play a with the same probability.
Similarly the (C, b) and (N, a) oﬃcials must play a with the same probability. Thus, since the proportion of (C, a)s to (N, b)s is πp/ (1 − π) (1 − p) ( π/ (1 − π)), the electorate will attach a probability greater than π to the oﬃcial’s being congruent if a is chosen and so will reelect her. [This is so even if the (C, b) and (N, a) types choose a with probability 1, because in this case, the ideological oﬃcials will tip the balance in favor of reelection].
Symmetrically, an oﬃcial will fail to be reelected if she chooses b.
Because oﬃcials are reelected if and only if they choose a, nonideological oﬃcials will opt for a, since δ 1.
1+δ Proposition A2 When qδ, the unique limit of perfect Bayesian equilibria as ρ → 0 2 is an FLP equilibrium in which an oﬃcial is reelected if and only if she has chosen (i) the optimal action when there is feedback or (ii) action a if there is no feedback.
We claim ﬁrst that, in equilibrium with ρ 0, if the electorate obtains Proof.
feedback about an oﬃcial’s ﬁrst-period choice, the oﬃcial will be reelected if and only if the decision was optimal.
To see this, suppose that a is the chosen decision and that the electorate has learned that it is optimal. If, in equilibrium, no type of nonideological oﬃcial chooses a with positive probability when a is optimal, the electorate will infer from the feedback that a congruent ideological oﬃcial has chosen a, and so will reelect. Similarly, if in equilibrium some type of nonideological oﬃcial chooses a with positive probability, when a is optimal, then the probability that (C, a) chooses a must be at least as big as the probability that (N, a) does so (since (C, a)’s preference for a is stronger than that of (N, a)). Thus, if it incorporates the possibility of a congruent ideological oﬃcial, the probability that an oﬃcial is congruent conditional on a having been chosen and revealed optimal is strictly greater than π, and so the electorate will again reelect the oﬃcial.
Suppose instead that a has been revealed to be nonoptimal. If, in equilibrium, no nonideological type chooses a with positive probability when a is nonoptimal, the electorate will infer from the feedback that a noncongruent ideological oﬃcial has chosen a, and so will not reelect. Similarly, if, in equilibrium, some nonideological oﬃcial chooses a with positive probability when a is nonoptimal, then the probability that (N, b) chooses a must be at least as big as that that (C, b) does so (since (N, b)’s preference for a is stronger than that of (C, b)). Thus, including the possibility of a noncongruent ideological oﬃcial, the probability that an oﬃcial is noncongruent conditional on a having been chosen and revealed nonoptimal is strictly greater than 1 − π, and so the electorate will not reelect the oﬃcial, establishing the claim for a. The argument for b is entirely symmetric.