Equality of Power and Fair Public Decision-Making

Abstract

Ronald Dworkin's equality of resources, and the closely related concept of envy-freeness, are two of the fundamental ideas behind fair allocation of private goods. The appropriate analog to these concepts in a public decision-making environment is unclear, since all agents consume the same "bundle" of resources (though they may have different utilities for this bundle). Drawing inspiration from equality of resources and the Dworkin quote below, we propose that equality in public decision-making should allow each agent to cause equal cost to the rest of society, which we model as equal externality. We term this equality of power. The first challenge here is that the cost to the rest of society must be measured somehow, and it is generally impossible to elicit the scale of individual utilities (in the absence of monetary payments). Again drawing inspiration from foundational literature for private goods economies, we normalize each agent's utility so that every agent's marginal utility for additional power is the same. We show that for quadratic utilities, in the large market limit, there always exists an outcome that simultaneously satisfies equal power, equal marginal utility for additional power, and social welfare maximization with respect to the normalized utilities.

Keywords: social choice, envy-freeness, equality of power, quadratic voting

JEL Classification: D61, D63, D71, D82