Different Forms of Government
By Arnold Kling
bureaucrats in a technocracy will be motivated to explore ideas, while bureaucrats in a democracy will be motivated to signal and recruit fidelity to the coalition’s pre-assigned ideas.
The point is that a country is better off without too much democracy. Instead, let the technocrats proceed on their own.
William Niskanen once wrote an article called, “Autocratic, Democratic, and Optimal Government.” It is reprinted in Reflections of a Political Economist. He made some quantitative assumptions about labor supply elasticities and such, and then he assumed that an autocrat maximized tax revenues, a democratic government maximized the post-tax, post-transfer income of the median voter, and that an optimal government maximized average income. The results:
The autocrat captures 34 percent of total output, leaving about 43 percent for the general population….[under democracy] The average net income is increased by about 145 percent…[under optimal government, relative to democracy] The average net income is increased by about 39 percent. Median net income, however, declines about 8 percent.
Of course, Bryan and Will are talking about a different issue than what the government maximizes. They are saying that in a democracy, government is constrained to be stupid, because the technocrats have to follow popular opinion about policy means, regardless of ends. So what you wind up with is something sort of like Niskanen’s median voter outcome, only considerably less efficient because of the stupidity constraint.
I would add that there is also a pretty large autocracy constraint, as well. That is, under our democracy, some major interest groups steal from the general population in exactly the way that an autocrat would try to do so. Compared with the autocrat, they steal somewhat inefficiently (ethanol subsidies, financial bailouts) because they have to be somewhat opaque in their methods.
The moral of the story is that what you want is competitive government. If Singapore were situated in Baltimore Harbor and there were free mobility, my prediction is that Maryland’s government would improve considerably.