Adam Przeworski: Democracy and the market

19 Oct 2015 Asta Waikwan TSOI D44005037

Brief Concepts(cont’d)

Prologue: Fall of Communism

Chapter 1: Theory of durable democratic institutions

Chapter 2: Choice of institutions during the transition to democracy

Chapter 3: Capitalism or socialism ? Which one generate growth with a humane distribution of welfare?

Chapter 4: Political dynamics of economic reforms

Questions from Prologue• What kinds of democratic institutions are most likely to last?

• What kinds of economic systems — forms of property, allocation mechanism, and development strategies — are most likely to generate growth with a humane distribution of welfare?

• What are the political conditions for the successful functioning of economic systems, for growth with material security for all?

• What are the economic conditions for democracy to be consolidated, allowing groups to organize and pursue their interests and values without fear and under rules?

Democracy

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(Pizzorno,1978)

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(Luxemburg,1970:202)

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*

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Democracy is a system of processing conflicts in which outcomes depend on what participants do but no single force controls what occurs.(12) It’s a system of ruled open-endedness, or organized uncertainty.(13)

*Actors know what is possible, since the possible outcomes are entailed by the institutional framework; they know what is likely to happen, because the probability of particular outcomes is determined jointly by the institutional framework and the resources that the different political forces bring to the competition.(13)

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(compliance)

? How are outcomes enforced

under democracy? Keys : Democracy , Rationality, Compliance

*5mins game

Graph (21)

outcomes of strategic situations

(1) Spontaneous self-enforcing outcomes

(2) Bargains, or contracts (23)

(3) Norms (25)

1 Existence: (welfare maximum over a

political community: common good, general interest, public interest, and the like(Existence)

2 Convergence:

3 Uniqueness:

(no benevolent dictator could know what is in the general interest)

*5mins game

(Democracy as an equilibrium)

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1 institution matter

2 different ways of organizing democracies

3 effective institutions make a difference through their profound distributional effects

Important to see what this hypothesis does not apply. (1) it doesn’t mean that democracy must have a social content if the institutions are to evoke compliance.(32) (2) the assertion that democracy cannot last unless it generates a satifactory economic performance is not an inexorable objective law.(33)

Democractic institutions must be “fair”. (33)

(Static version)They must give all the relevant political forces a chance to win from time to time in the competition of interests and values. (33)

(Dynamic version) political institutions “must be effective” they must make even losing under democracy more attractive than a future under non-democractice alternatives (33)

Institutional Design•

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• 1853 1950s-1990s

• 1789

• 1948

1.

2.

3.

4.

“Indeed, I discovered, much to my surprise, that we do not have sufficiently reliable empirical knowledge to answer questions about institutional design.” (35)

1. “worth noting that electoral majorities have been rare in the history of successful democracies;in the postwar period only about one election in fifteen has resulted in a majority of votes cast for one party.”(36)

2.”Successful democracies are those in which the institutions make it difficult to fortify a temporary advantage. Unless the increasing returns to power are institutionally mitigated, losers must fight in the first time they lose, for waiting make it less likely that they will ever succeed. “(36)

3. “governments must be able to govern, and this implies that they must be able to prevent some demands from reaching the public sphere and certainly that they cannot tolerate all important groups having veto power over public policy”(37)

Transition to Democracy

Q1

(self-enforcing) (democratic pact)?

Q2

Q321

Why do outcomes appear uncertain?

• Social choice theory :

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• Lechner

theme How dirty campaigns should be ?

Illustrate example is?

Credit : Focus Taiwan

• Aumann(1987)aka

Przeworski

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possibility

Conclusion

Democracy is a system of processing conflicts in which outcomes depend on what participants do but no single force controls what occurs. Outcomes of particular conflicts are not known ex ante by any of the competing political forces, because the consequences of their actions depend on actions of others, and these cannot be anticipated uniquely. (12)

Recommend Readings

How to Lie with Statistics by Darrell Huff

since 1954

Correlation does not imply causation.

Chapter 8 Post Hoc Rides Again

Political Economy of Democratic Transitions by S.Haggard & R.Kaufman

since 1995

Chapter 3 Surviving Crises, Withdrawing in Good Times

Chapter 4Comparing Authoritarian Withdrawals

Challenge me…