Values, Markets and the State
Edited by Geoffrey Brennan and Giuseppe Eusepi
Chapter 8: The Deregulation of the Political Process: Towards an International Market for Good Politics
Reiner Eichenberger1 and Michael Funk Introduction Elections are deemed to mediate the provision of public goods along the citizens’ preferences. However, it is obvious that politicians often renege on their campaign promises and tend to be captured by powerful special interests; furthermore, they are temped to create political business cycles. In order to increase the government’s incentives to cater for the citizens’ preferences, public choice scholars typically propose to adjust political institutions. Many authors focus on federalism and hence, on strengthening the citizens’ exit option. Other scholars concentrate on increasing the impact of the citizens’ voice in the democratic process, for example, by institutionalizing direct democracy. But while high migration costs prevent federalism from achieving full efficiency (for example Epple and Zelenitz, 1981), direct democracy cannot eradicate the asymmetric influence of special interests, although there are strong improvements over representative democracy (Frey, 1994; Eichenberger, 1999a), especially when direct democracy is combined with an extended role of elected auditors (Eichenberger and Schelker, 2007). In this chapter, therefore, a new proposal for reform of the political process is presented, which targets both the executive as well as the legislative branches. The concept aims directly at the political process, which is regulated by three kinds of restrictions: Protectionist rules: almost everywhere, only nationals are allowed to run for political office. Moreover, the candidates often have to live in their constituency. l Production process regulations: usually only individuals can run for office. Parties and firms are not allowed to do so, but have to...
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