In a way, Jones has written a timid book. Most of his proposed reforms are marginal. And yet, to many people, advocating ten percent less democracy will seem highly controversial. “Most prominent political thinkers… take the unalloyed merits of democracy for granted.” In his book, Jones suggests some “democracy-reducing reforms that take control of the state a little further away from the average citizen.” He suggests there might be a Laffer curve for democracy and that many rich countries in the modern world, particularly America, might be on the right side, sloping downward.
The book uses anecdotes to make some points, but Jones primarily relies on time-series or cross-country data. He claims, “there is no professional consensus at all on whether higher levels of democracy cause higher growth, cause slower growth, or cause nothing much at all.” First, he suggests longer terms for politicians. “We have three major areas where governments facing a looming election are reluctant to take the tough but probably effective medicine: trade policy, labor regulation, and exchange rate policy.” Politicians know when the voters are watching. “Senators… tend to backload the pork, delivering 15% more projects and 15% more dollars in home-state spending in the last two years of their cycle…. When a senator is in cycle, she’s 10 percentage points less likely to vote for a trade deal.”
Jones recommends those parts of the United States system that are more-shielded from politics and the voters. He praises the independence of the Federal Reserve. “Independent, generally less democratic central banks… averaged 4% lower long-run rates of annual inflation compared to countries with the most politician-dependent…. Countries with more independent central banks appear to have fewer financial crises.” The judicial branch and regulatory agencies are two other areas where Jones has found better outcomes from appointing, rather than electing, officials. “Appointed treasurers are able to get lower interest rates on the city debt—about half a percentage point lower on average—than elected officials.” Jones finds, “States with elected regulators are less likely to pass through cost changes into prices [and] utilities invest less in places with elected regulators.” One important measure of independence is funding. “Having to ask the government for annual appropriations… obviously weakens the political independence of the regulator.” Jones also suggests using executive headhunting-style firms to identify talent, especially those who might not be citizens, and filling local, state, and federal posts with them. Finally, Jones suggests expanding political independence into areas like an independent tax commission. “Let Congress decide on the values, let the Federal Tax Board iron out the details.”
Jones now gets into more controversial ground. He suggests tilting the scales of voting to give more weight to those who are smarter. “The more educated tend to know more about how government works and about how different policy proposals—even well-intentioned ones—may or may not work as planned…. Since politicians pander to voters, not to nonvoters, then any improvement in the skill level, the information level, or the human capital of voters will mean that politicians will be pandering to customers who know more about the product.” He suggests a practical idea, “Everyone with a current right to vote gets to vote in elections for the lower house and for the head of state, but only those with a college degree or equivalent can vote in elections to the upper house.”
Another controversial idea is to give voting rights to a country’s bondholders. “Bondholders are an important and useful check on the potentially reckless behavior of governments…. Long-term government bondholders—investors holding maturities of, say, ten years or longer—should be given an explicit advisory role in modern democracies as a check on the shortsighted, impulsive, frequently ignorant electorate…. perhaps through nonbinding public resolutions where one dollar of bonds means one vote.” Jones goes further, advocating for “formal annual shareholder-style meetings between elected bondholder representatives and elected government officials, formal appointments of bondholder representatives to high-level finance ministry positions, or even handing bondholder representatives limited forms of veto power over economic policy actions.” He even suggests to “grant the bondholder council a small number of seats in the upper house of the national legislature…. The number of seats that belonged to these bondholders would rise as the nation’s ratio of government debt to national income rose. One more seat in the upper house for every 10% increase in the debt-to-income ratio.”
Jones also suggests that political party machines have come to influence too little of policy in America today. “The machine has a longer political life than most politicians, so it cares whether the country will be rich enough, stable enough, safe enough, for it to remain strong for decades to come. The machine has patience…. Machines are to politics as banking is to the economy: being long-term, repeat players, they can extend something like political credit.” He also suggests staggering election cycles. “If there’s more noise in the public sphere, then any one election tells us less about what the public is really saying…. The bigger the random swings, the stronger the argument is for not listening too closely to any one election…. Any country with four, six, or… eight-year terms could easily stagger out the terms to create what the Senate calls “a continuing body.” And one benefit of a continuing body is that it will have a more stable, more coherent mind.” Jones concludes, “if a modern, relatively prosperous nation wants a greater degree of liberalism, it probably wants a little less democracy.”
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