Economists and Democracy

I often wonder about how the democracy manage to survive in a world where scare ressources imply so many difficulties to share them….What can be the nature of contract between citizens ? In fact The quality of democratic governance can sometimes be augmented by reducing the discretion of elected representatives. Well-functioning democracies often delegate rule-making power to quasi-independent bodies when the issues at hand are technical and do not raise distributional concerns; when log-rolling would otherwise result in sub-optimal outcomes for all; or when policies are subject to myopia, with heavy discounting of future costs. Independent central banks provide an important illustration of this. It may be up to elected politicians to determine the inflation target, but the means deployed to achieve that target are left to the technocrats at the central bank. Even then, central banks typically remain accountable to politicians and must provide an accounting when they miss the targets. Similarly, there can be useful instances of democratic delegation to international organizations. Global agreements to cap tariff rates or reduce toxic emissions are indeed valuable. But economists have a tendency to idolize such constraints without sufficiently scrutinizing the politics that produce them. To deep into the analyze of this link between Economy and Democracy, you should read this amazing paper of a great economist : Dany Rodrik.

For a french version : click here

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