Representative Versus Direct Democracy: The Role of Informational Asymmetries

34 Pages Posted: 22 Jul 2003

See all articles by Anke S. Kessler

Anke S. Kessler

Simon Fraser University (SFU) - Department of Economics; University of Bonn - Economic Science Area; Centre for Economic Policy Research (CEPR)

Date Written: May 2003

Abstract

The Paper studies the relative merits of direct and representative legislation in a setting where voters are uncertain both with respect to the likely consequences of different policies and with respect to the political preferences of their fellow citizens. Under representative legislation, the latter translates into uncertainty on the elected official's future policy intentions, which involves a loss of control. The resulting discretionary power, however, also leads officials to endogenously acquire competence on the issues they oversee and specialize in policy formation. Policies determined in representative democracies are therefore better tailored to relevant contingencies but less close to the preferences of a majority than those determined in popular ballots. It is shown that the extent of the resulting trade-off depends on the set of alternatives among which the policy is to be chosen. Two extensions, referenda and the possibility of re-election, are briefly considered.

Keywords: Direct democracy, representative democracy, constitutional choice, delegation

JEL Classification: D61, D78

Suggested Citation

Kessler, Anke S., Representative Versus Direct Democracy: The Role of Informational Asymmetries (May 2003). CEPR Discussion Paper No. 3911. Available at SSRN: https://ssrn.com/abstract=424660

Anke S. Kessler (Contact Author)

Simon Fraser University (SFU) - Department of Economics ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada
604-291-3443 (Phone)
604-291-5944 (Fax)

University of Bonn - Economic Science Area ( email )

Adenauerallee 24-42
D-53113 Bonn
Germany
+49 228 739 246 (Phone)
+49 228 739 221 (Fax)

HOME PAGE: http://www.wipol.uni-bonn.de/~kessler/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
31
Abstract Views
1,646
PlumX Metrics