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Public Choice and the Challenges of Democracy

Edited by José Casas Pardo and Pedro Schwartz

This timely and important volume addresses the serious challenges faced by democracy in contemporary society. With contributions from some of the world’s most prestigious scholars of public choice and political science, this comprehensive collection presents a complete overview of the threats democracy must confront, by both contesting accepted ideas and offering new approaches. Using theoretical and empirical evidence, this book will be a significant addition to the current literature, providing original and enlightening perspectives on the theory of democracy.
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Chapter 13: Democratic Decision, Stability of Outcome and Agent Power, with Special Reference to the European Union

Manfred J. Holler and Stefan Napel


Manfred J. Holler and Stefan Napel 1 INTRODUCTION In The Economics of Public Choice, McNutt (2002, pp. 282ff.) refers to a so-called ‘Holler–Steunenberg’ model. Since we presume that it is largely unknown to most public choice scholars, this chapter will discuss the roots of this model and further elaborate on its theoretical frame and potential of application. The model derives from a contribution by Bernard Steunenberg (1994), entitled ‘Regulatory policymaking in a parliamentary setting’, and a comment of one of the present authors (Holler, 1994), both published in the Jahrbuch für Neue Politische Ökonomie. Sections 2, 3 and 4 are basically identical with this comment. Section 5 contains an extension and discusses decision making in the European Union. In a nutshell, the model demonstrates the impact of procedural rules to determine the political outcome in a democratic setting in which agents (bureaucrats or policy makers) are controlled by their principal(s) by means of voting. Steunenberg shows that in order to understand a specific regulatory policy we have to take into consideration the preferences of the agent and of its principal, the legislature, as well as the procedural rules of parliamentary decision making even if the parliament turns out not to decide on a bill concerning a given issue. In this chapter, we shall summarize his application of proposal-veto rule and the gatekeeping procedure and the implications for decision making which follow from this procedure. In Steunenberg (1994) single-peaked preferences are assumed. Holler (1980, 1982, 1994) demonstrates...

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