The Political Foundations of Democracy and the Rule of Law

Barry R. Weingast (1997)

Stefano Acuto

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Introduction: Synthetic treatment of the problem of democracy stability and

the rule of law.

Weingast shapes a game-theoretic model to analyse three puzzles:

1. Relationship between citizen values and elite interests in democratic stability.

2. Democratic stability in divided societies.

3. Elite pacts.

The model: Assumptions I1. All citizens have preferences and values about limits on government

2. Each citizen, given his preferences, is able to classify state actions into two mutually exclusive categories:

I. Legitimate action.II. Fundamental transgression.

3. The model focuses on the relationship between one single political official (the sovereign) and the citizenry. To remain in power the sovereign must retain sufficient citizen support.

4. Self-enforcing limits: the sovereign’s self interest leads him to respects limits because otherwise the citizens will withdraw their support to him.

5. Non self-enfrocing limits: citizens are unwilling to defend the limits, then the sovereign can violate them and retain sufficient support to survive.

6. To prevent the violation of democratic rights citizens must cooperate.

Model 1: Game Tree

Model 1: payoffs

Model 1: Pure Coordination I Game that concerns interaction between polity and economy.

Players: Sovereign, S, and two groups of citizens, A and B.

The economy produces the surplus but the quantity produced and its distribution depend on political choices.

A set of political and economic rights has been specified and they are compatible with economic prosperity.

The enforcement of these rights depends on the interaction among players.

The sovereign holds political power and may choose to transgress or to not transgress citizens’ rights. Power allows him to gain at the citizens’ expense, but transgression generate an economic loss either.

Model 1: Pure Coordination II However, the sovereign doesn’t hold power forever, so, in order

to remain in office he needs the support of a sufficient subset of citizens. (In this model the sovereign’s survival requires the support of at least A or B but not both).

Looking at the game tree, we notice that the sovereign moves first and has to decide whether to Transgress or Not Transgress.

Once the sovereign make is move, A and B have to choose simultaneously whether to Challenge or Acquiesce the Transgression.

Challenging is assume to be costly for A and B.

If both A and B challenge, then the sovereign is deposed.

If one group challenge and the other acquiesce, then the transgression succeeds.

Model 1: Pure Coordination III If both A and B acquiesce, the transgression succeeds.

In Figure 2 we have the payoffs for each player. The outcomes are determined by the strategy combinations chosen by the three players.

The structure of the game produces a problem of coordination among the citizens: if they all act coordinately they can prevent transgression, if they don’t the sovereign can transgress citizens’ rights and survive.

This game has two equilibria: 1. If S transgress, then A and B both acquiesce.

2. If S doesn’t transgress, then A and B both acquiesce.

Model 2: Game Tree

Model 2: Payoffs

Model 2: Coordination in a Political Context I

Model 2 adds two political elements to the problem of transgression:1. The sovereign needs not to transgress against all citizens

simultaneously.

2. Transgressions have distributional implications.

The main assumptions are the same of Model 1.

Social surplus is maximized when no transgression nor challenging happen. In the one-shot game this is not an equilibrium.

In the one-shot game we have three equilibria:1. S transgress against both A and B, and they both acquiesce.

2. S transgress against A, then both A and B acquiesce.

3. S transgress against B, then both A and B acquiesce.

Model 2: Coordination in a Political Context II

The interpretation of these equilibria corresponds to how citizens react to a transgression.

The transgression against one of the two player succeeds because the players may challenge only in the case of an outrageous violation, e.g. when the sovereign targets both players.

A successful transgression against both, otherwise, may represent the idea that the citizens show a passive obedience because they believe that the sovereign rules by divine right.

This model doesn’t support the idea that a citizen ought to respond when any citizen is on target: when S transgresses against one group, the other is better off acquiescing.

Model 2: Coordination in a Political Context III

If the game is repeated, according to the “Folk Theorem”, the equilibria of the one-shot game are also equilibria in the repeated game. Moreover, the repetition must allow citizens to support the Pareto-optimal outcome, which has these equilibrium strategies:1. S: If either A or B has ever acquiesced to a transgression, transgress

against bot A and B. Otherwise, don’t transgress.

2. A: If B has challenged every previous transgression by S, then challenge if S transgresses and acquiesce otherwise. If B has acquiesced to a previous transgression by S, acquiesce in every period.

3. B: If A has challenged every previous transgression by S, then challenge if S transgresses and acquiesce otherwise. If A has acquiesced to a previous transgression by S, acquiesce in every period.

The importance of achieving this equilibrium is that it supports social consensus: all citizens hold the same views about transgressions and citizen duties.

Implication of the Model for Limited Government I

Although games with multiple equilibria often make prediction difficult, in this case the most natural equilibrium is the asymmetric one (the transgression succeeds against one of the two groups).

This holds because societies with massive coordination problem are unlikely to resolve it in a wholly decentralized manner.

People’s natural diversity impedes coordination: for example the economic differences among citizens or the membership of different cultural, ethnic, social, religious or political groups.

The model shows that, in absence of a common view of the political boundaries, a coalition between the sovereign and one group is stable. Thus, the most natural equilibrium of the game is a coordination failure.

Implication of the Model for Limited Government II

To cooperate against the sovereign’s transgressions, the citizens need a coordination device (e.g. constitutions, a charismatic leader, massive galvanising events).

To be effective, the coordination device must be self-enforcing, that is, it must be in the interest of the sovereign to abide by it.

In terms of the model, limits become self-enforcing when citizens consider the state’s limits in such a high consideration that they are willing to withdraw their support to the sovereign to defend them.

This doesn’t mean that citizens have the identical values, but that they agree on a set of actions that trigger their reactions. In other words, they have to find a compromise that make them better off respect to the benefits of acquiesce a transgression.

Hence, democratic stability depends on both mass and elites behaviour.

The English Glorious Revolution as an Elite Pact

When the Glorious Revolution occurred there were two main factions: Whigs and Tories (which can be considered as the two groups A and B of the model).

During the the reign of the late Stuarts (1660-1688), the Tories supported the crown, while Whigs opposed it. Moreover, the late Stuarts violated Whigs’ rights retaining on Tories support.

After the removal of the Whigs, the crown tried to use the same technique of disenfranchisement against the Tories. At this point the two factions formed a united political nation forcing James II to leave and inviting in a new monarchy, that of William and Mary.

The most important thing in Weingast’s analysis is that before the new sovereign took power, the parliament approved the “Revolution Settlement” that can be considered as a coordination device.

Puzzle 1: Values, Interests and Democratic Stability I

“If there is no consensus within society, there can be little potentiality for the peaceful resolution of political differences which is associated to the democratic process”.(Almond an Verba, 1963)

Societies that have resolved their coordination dilemmas achieving the Pareto-optimal equilibrium exhibit three phenomena:1.Stable democracy.2.Set of political rights that define limits on the state.3.Shared set of beliefs among the citizens that those limits are worth defending.

Lijphart and Barry argued that democracy must be considered as an independent variable and values as the dependent variable.

Weingast suggest another alternative: the resolution of the coordination dilemmas in a society creates both consensus among citizenry and a stable democracy.

Puzzle 1: Values, Interests and Democratic Stability II

Przeworski (1991):• Why would an incumbent party that has lost an election accept its defeat

and not subvert the democracy in order to maintain power? • Incumbents payoffs associated with winning, loss and subversion are: Wt,

Lt and St.• If the party looses in the period 1, there will be a compliance problem if

S1 > L1. • The democratic process provides the opportunity for winning in period 2.

If the defeated party in period 1 complies, in period 2 its expected payoff for period 2 is C2 = pW2 + (1 – p)L2 .

• Today’s losers will comply if:L1 + C2 > S1 + S2

• To consider the role of the constitutions Weingast rewrites the last inequality as:L1(α) + C2 > S1 + S2The term αreflects the degree of constitutional restrictions where higher level of αcorrespond to greater restriction.

• The results from these two equations imply that democratic stability depends on elite willingness too.

Puzzle 1: Values, Interests and Democratic Stability III

Putnam (1993):• Democratic stability depends on a specific form of social organization

which he calls “civic traditions”.

• Putnam’s take into consideration the case of northern Italy and the southern Italy: the first can sustain cooperation due to its strong tradition and norms, while the second is characterized by mutual distrust, disorder, isolation and criminality because of its lack of civic traditions.

• However this framework doesn’t take into consideration the role of elites.

• Weingast thinks that including his results to Putnam’s work will improve it, for instance, the regions with less civic traditions can be considered as the asymmetric equilibrium seen in Model 2: some citizens are better off in vertical societies because they are favoured by the sovereign transgressing other’s rights.

Puzzle 2: Democratic Stability in Divided Societies I

Belonging to different ethnic, cultural, linguistic or religious groups typically imply different views about several aspects of government, including the appropriate limits on the state.

Horowitz and Rabushka studied societies divided by ethnic diversity. They found out that limits on government are difficult to sustain in these societies for several reasons:1. Significant differences in values among members of different groups

impede the resolution of the coordination problem to achieve consensus over fundamental rights and limits of the state.

2. As in the asymmetric equilibrium one group may benefit from exploiting the other.

3. It may be difficult to create a pact that implements peace.

Otherwise, as Fearon and Laitin argued, not all division societies are problematic as the ones studied by Horowitz.

Lijphart’s “politics of accommodation” in the Netherlands suggests that to achieve credible guarantees to the different groups, each group has to support the national system because it provides significant autonomy to each group.

Puzzle 3: Elite Pacts I Under certain circumstances pacts enable societies to move from

the nondemocratic equilibrium to the equilibrium of limited government that can sustain a stable democracy.

Weingast suggests that the most important role of a pact is to construct a focal point about limits of the state.

The model suggests that successful pacts meet two conditions:1. All participants perceive that they are better off under the pact than

under the status quo.2. The pact is self-enforcing, hence the elites and their followers must be

willing to punish those who try unilateral defection from the pact.

This interpretation of pact as constructing a focal equilibrium yields two prediction:1. Pacts cannot be imposed at just any time.2. The pacts have to be self-enforcing.

Examples: Wood’s (1995), study about El Salvador peace accords and The Missouri Compromise of 1820.

The Consolidation of Democracy Distinction between instauration and consolidation of democracy:

1. The instauration of democracy requires some procedural aspects such as regular elections.

2. Consolidation of democracy, in addition to procedural aspects, requires, according to Weingast’s model, that a society resolve its coordination dilemmas concerning the legitimate boundaries of the state.

Conclusions The survival of democracy and the rule of law requires that limits

on state are self-enforcing.

Enforcement are at the core of several problems such as the three puzzles presented in this paper.

Limits on state are problematic because f a massive coordination problem.

Three puzzles answered using this model.

To survive democracy and rule of law have to be self-enforcing.