«The Politician and the Judge: Accountability in Government Jean Tirole∗ Eric Maskin First version, April 2001 Revised, March 2004 Abstract We build ...»
The main arguments against holding referendums in representative democracies include: (1) ordinary citizens have neither the analytical skills nor the information to make wise decisions; (2) decisions by elected oﬃcials involve weighing the intensity of preferences and melding the legitimate interests of many groups into policies that will give all groups something of what they want; (3) decisions made by representatives are more likely to protect the rights of minorities; and (4) by allowing elected oﬃcials to be bypassed and by encouraging oﬃcials to evade divisive issues by passing them on to the voters, referendums weaken the prestige and authority of representatives and representative government.” (pages 17-18).
We have already touched on points (1) and (3), and these will ﬁgure prominently in our analysis.
6. For example, the “great things” she does might consist of favors for a particular interest group, in which case her legacy beneﬁts could include what the interest group does for her in return.
7. The desire to hold oﬃce is a commonly assumed motive in the political economy literature dating back to Robert Barro (1975) and John Ferejohn (1986). It is our legacy motive that is nonstandard (although, we believe, quite realistic).
8. Opinions diﬀered in the 1787 U.S. Constitutional convention on the degree to which oﬃcials should be responsive to public opinion. In this paper, however, we take the view of delegate George Clymer (see Charles Beard 1913, p 193), who wrote that “ a representative of the people is appointed to think for and not with his constituents.” In doing so, we adopt the usual political-science deﬁnition of “representative democracy ” as a system in which voters do not instruct their representatives. The practice of instructing 42 representatives was widespread in the 18th century (e.g., deputies to the Estates General in France, American states before the 1787 Constitution). The modern version of representative democracy gained acceptance in the 18th century in England, and with the 1787 Constitution in the US and the 1789 revolution in France. See Manin (1997, chapter
5) for more details.
9. Received theories of democracy in political science, e.g., Robert Dahl (1956), often stress the importance of repeated elections for making government responsive to the public. We argue that “moral-hazard-correcting” responsiveness is beneﬁcial, whereas simply carrying out what the public wants can be counterproductive.
10. We use the term “judicial power” to refer to nonaccountable oﬃcials because, in most democracies, judges–at least, at the highest levels–are appointed rather than elected.
In the U.S., for example, all Federal judges are appointed and with lifetime tenure. Most of what we say about “judges,” however, applies equally well to appointed government bureaucrats whose tenure is not appreciably aﬀected by their actions.
Interestingly (and consistent with the theory developed here) elected judges in the U.S. appear to “pander” more (and thus behave more like politicians) than their appointed counterparts. Speciﬁcally, Besley and Abigail Payne (2003) analyze employmentdiscrimination cases and ﬁnd that in states where judges are subject to reelection discrimmination charges are ﬁled at a higher rate. They attribute this ﬁnding to an incentive rather than a selection eﬀect, i.e., elected judges are likely to be more generous in awarding damages. (And among states with appointed judges, those where judges serve life terms– so need not worry about reappointment–have even fewer discrimmination charges ﬁled.) Relatedly, Besley and Coate (2000a) show that electricity prices paid by retail consumers are lower in those U.S. states that elect regulators. The literature also provides evidence (reviewed in Besley and Ann Case 2003) that U.S. Governors subject to term limits behave diﬀerently from those who are not.
11. As we have already noted, there is evidence from the empirical literature that elected 43 and appointed oﬃcials behave diﬀerently. In addition to the articles cited in footnote 10, work by Henning Bohn and Robert Inman (1996) and Andrew Hansen (1999), (2000) suggests that elected judges (whom we would call “politicians”) are more independent than appointed judges.
12. Moral hazard is the only informational imperfection in models following the BarroFerejohn tradition. The absence of adverse selection implies that voters learn nothing about an oﬃcial from her behavior, and thus are indiﬀerent about whether or not to reelect her. Thus disciplining her relies on a particular resolution of this indiﬀerence.
13. Gilat Levy (2000) shows that a careerist judge overturns precedent more than is socially eﬃcient, as such behavior is a signal of the judge’s ability. That paper also looks at the interaction between this incentive and endogenous appeals.
14. We can accommodate heterogeneous preferences as long as they are such that maximizing overall welfare is the same as maximizing the welfare of the median voter. Thus, in the basic model, we are supposing that the welfare of a minority cannot outweigh that of its complement.
15. In the case of a heterogenous electorate, p denotes the median voter’s uncertainty about a; it is not to be interpreted as the fraction of voters who think a is optimal.
16. We will assume that constitutional dictates cannot be evaded. For a discussion of this assumption, see Barry R. Weingast (1997).
17. With a heterogeneous electorate (see footnotes 14 and 15), the congruent oﬃcial can be thought of as representing the interests of the median voter, whereas the “noncongruent” oﬃcial represents some other group of voters.
18. We are supposing that the preferences of the congruent oﬃcial are perfectly aligned with the interests of the electorate, while those of the noncongruent oﬃcial are diametrically opposed. Without any change in the qualitative results, we could relax this assumption, so that the noncongruent oﬃcial simply had a higher probability than the congruent oﬃcial of being at variance with the electorate in both periods.
19. The assumption that this utility accrues only if the oﬃcial herself selects the action captures the legacy motivation.
20. The model can be extended to an overlapping generations framework with two-periodlived oﬃcials. The challenger’s incentives are then similar to those of the incumbent one period earlier. Since our focus is on the incumbent’s behavior, our simpler two-period model involves little loss of generality (but see footnotes 29 and 31).
21. FP is not the only equilibrium, but we claim that it is the most reasonable one to focus on. The only other pure-strategy equilibrium is that in which the oﬃcial always chooses b (the unpopular action). However, this “unpopular pandering” equilibrium is not robust to a small perturbation to the pool of candidate oﬃcials. Speciﬁcally, suppose that we introduce a small proportion ρ of oﬃcials who have weak oﬃce-holding motives (their discount factor is lower than 1): a fraction π of these are congruent, the rest noncongruent.
In the appendix, we show (see Proposition A1) that, for ρ 0, the FP equilibrium of the text is the unique equilibrium in which the oﬃcial does not randomize.
Finally, although there are mixed-strategy equilibria in which the oﬃcial randomizes between a and b, each of these is non-Markovian in the sense that there are two diﬀerent states (i.e., two realizations of the uncertainty about the oﬃcial’s congruence and action a’s optimality) in which all actors have exactly the same preferences and yet behave diﬀerently in the two states. These equilbria are, therefore, eliminated by the requirement that equilibrium strategies be Markovian (see Proposition A1).
22. That V be concave is not the only reasonable possibility. If, for example, the payoﬀ from an optimal decision in the ﬁrst period were enhanced by an optimal second-period decision, then V might be convex.
length of term will aﬀect their incentive to pander. Because this factor is more complicated, we will not take it up here.
24. We assume here that the status quo, if chosen, is selected for two periods.
25. In our basic model, an oﬃcial always gets nonnegative utility (either R or G+R) from holding oﬃce. However, we can generalize this set-up to allow for the possibility that an oﬃcial who chooses her nonpreferred action derives negative utility overall, in which case she would not promise that action simply to get elected.
26. If there is a cost to making campaign pledges, then some candidates who prefer the nonoptimal action may refrain from making pledges at all, since they are unlikely to be elected.
27. For δ 1, the possibility of feedback does not alter the oﬃcial’s ﬁrst-period behavior:
she always chooses her preferred action. But feedback allows the electorate to learn with certainty whether or not the oﬃcial is congruent.
28. Here we are assuming that, as in footnote 21, a small proportion of oﬃcials who have weak oﬃce-holding motives are introduced and this proportion is then sent to zero.
29. If we instead adopted an overlapping-generations framework, the oﬃcial would no longer always choose the optimal action in equilibrium, even in the case δq ≥ 1. Instead we would obtain an equilibrium very much like what we call partial pandering (see footnote 31).
30. In section III, we rule out equilibrium in which the oﬃcial randomizes by appealing to Markov equilibrium (see footnote 21 and Proposition A1). Although partial pandering entails randomization by the oﬃcial, it is consistent with the Markovian requirement because, once q 0, the diﬀerent types of oﬃcial no longer have the same preferences
δq 1. Instead, we would get a PP equilibrium in which (i) types (C, a), (C, b), and (N, b) choose their preferred actions, (ii) type (N, a) panders with probability y, and (iii) the oﬃcial is reelected only when there is feedback that she chose the optimal ﬁrst-period action.
32. To be sure, there also exist Congressional investigation committees in the U.S..