1. Introduction
Many economists and political philosophers accept a simple argument for empowering governments to regulate private economic activity: Markets suffer from various market failures. Sometimes, governments can correct or prevent these market failures through various interventions and regulations. The expected benefits of intervention exceed the expected costs. Therefore, governments should intervene.
Our argument in this paper turns on a kind of parity principle. The line of reasoning used to justify market regulation should extend to any domain characterized by structurally similar failures. Where two domains exhibit comparable failure modes, there is, absent a relevant disanalogy, a defeasible presumption in favour of considering analogous forms of intervention.
In particular, we argue that democratic decision-making displays many of the same failure modes that economists and philosophers cite in support of market regulation. These include the problem of the underprovision of public goods, information asymmetries, lack of full competition, principal-agent problems, rationality failures, and extensive externalities. These considerations create a strong presumption that the arguments for market regulation also support democratic regulation.
To be clear, our claim is not that markets and democratic institutions are identical. Rather, it is that the justification for intervention should be applied consistently across both domains. While many economists and philosophers accept regulatory responses to market failures, they often treat democratic processes differently. Our aim is to highlight and challenge this asymmetry. We’re not arguing that scholars have overlooked failures in democratic systems or failed to propose institutional reforms. Instead, our claim is that economists and philosophers often accept market failure arguments as grounds for economic regulation while resisting parallel reasoning when it is applied to democratic decision-making.
After arguing for parity between market and democratic domains, we show why attempts to establish that votes are functionally or morally different fail. We then propose various forms of democratic regulation, without defending radical proposals that would replace democracy with alternative forms of government. Some of the interventions we discuss below have been defended on other kinds of grounds – such as equality, fairness, autonomy, and so on. We put aside those arguments here. Instead, we want to show that the arguments against laissez-faire capitalism apply in a rather straight way against laissez-faire democracy. This should be a rather startling result, considering that laissez-faire capitalism is widely rejected, yet laissez-faire democracy is widely accepted.
2. From market failure to regulation
A market failure occurs whenever a market fails to achieve Pareto efficiency (Bator Reference Bator1958). An outcome or situation is Pareto-efficient just in case it is impossible to make one person better off without making someone worse off. ‘Market failure’ is a rigoristic concept; a market that is 0.0001% short of Pareto efficiency exhibits market failure so defined (Ledyard Reference Ledyard, Durlauf and Blume2017).
As a result, this does not imply that every market failure is a serious problem. For one, market failures are often self-correcting by markets’ tendencies toward equilibrium (Kirzner Reference Kirzner1992). Still, in some cases, according to standard or textbook economics, markets are not sufficiently self-correcting. In some cases, the welfare loss or harm caused by the market failure is significant (Cowen and Tabarrok Reference Cowen and Tabarrok2021; Krugman and Wells Reference Krugman and Wells2021; Mankiw Reference Mankiw2017). If so, this creates a prima facie case for government regulation and intervention, or so most economists (and philosophers) think. Whether this prima facie case turns into an all-things-considered case depends in turn upon government failure, which we will discuss shortly. Let’s consider each of the major kinds of market failures:
Public goods: A public good is defined as any kind of good which is non-rivalrous and non-excludable. A good is non-rivalrous when one person’s consumption does not reduce another’s. A good is non-excludable when providing that good for one person means providing it for many or all; or, more precisely, it is difficult or impossible to prevent others from consuming it once it’s provided for one or a few (Demsetz Reference Demsetz1970; Samuelson Reference Samuelson1954, Reference Samuelson1955).
Few goods, other than perhaps military or asteroid protection, are strictly non-rivalrous or non-excludable. For instance, roads are partly rivalrous, as anyone who has driven in traffic knows, and they are excludable, as anyone who has seen a toll-road knows. But some goods, including roads, are closer to being non-rivalrous and non-excludable than others. They exhibit the problems public goods have even if they are not perfectly public goods.
Standard textbook economics holds that markets will tend to underprovide public goods because of free-rider problems. Anyone could consume a public good without paying for it. Thus, public goods will be underprovided. Governments can overcome this problem by coercing or incentivizing everyone to provide the good.
Information asymmetries occur when, in making a transaction or deal, one party is substantively better informed than the other, including cases where one party is ignorant or very badly informed. Examples include medical doctors or mechanics offering advice to clients; the clients might lack expertise and have little choice but to repose trust in some expert. Situations like this create opportunities for the better-informed party to exploit or defraud the worse informed party, and thus sometimes lead to inefficient and welfare-reducing trades which are not overcome by private oversight, private reputation rankings, and the like (Akerlof Reference Akerlof1970; Arrow Reference Arrow1963; Wilson Reference Wilson2008). Government regulation often aims to control the method of sale, method of production, the content of a service or good, or the conduct of producers.
Principal-agent problems occur when, thanks to imperfect monitoring, transaction and information costs, information asymmetries, or other problems, agents who are entrusted to work on behalf of their fiduciaries instead misuse resources, information, and power for their own personal benefit. For instance, a corporate board is supposed to manage the company for the benefit of shareholders (among others) but could instead promote their own incomes at shareholder expense. General education committees are supposed to choose course requirements that best educate students, but they could instead choose courses to ensure their own departments get enrolment (and money). Economists often argue that governments should impose regulations which ensure that agents work on behalf of their principals (Grossman and Hart Reference Grossman, Hart, Dionne and Harrington1992; Haubrich Reference Haubrich1994).
Uncompetitive markets occur whenever markets are not in perfect competition. A perfectly competitive market includes, among other criteria, that no buyer or seller has market influence, that products and services are seen as identical commodities, and that transaction and information costs are low (Bénassy Reference Bénassy1982; McKenzie Reference McKenzie1959). In the real world, few markets are fully competitive, but some are closer than others. (‘Competitive market’ is another rigoristic concept.)
In some cases, markets can be sufficiently uncompetitive that individual firms or other market agents can use their market power to produce harmful or badly inefficient outcomes. For instance, a monopoly drug provider might be able to charge exorbitant prices which create deadweight losses rather than welfare gains. Economists often argue that governments should regulate or intervene into markets to break up monopolies, monopsonies, and cartels, and that government regulations should aim to enhance the competitiveness of markets or force non-competitive markets to generate the outcomes competitive markets would produce (Cowen and Tabarrok Reference Cowen and Tabarrok2021; Krugman and Wells Reference Krugman and Wells2021; Mankiw Reference Mankiw2017).
Rationality failures occur when consumers, workers, and other market agents do not follow the norms of epistemic or instrumental rationality. They might have inconsistent time-preferences, or process information in poor ways, such as being too easily swayed by marketing materials and social pressure. They might engage in radical or hyperbolic discounting of the future and thus make suboptimal choices long-term. They might have intransitive preferences. They might be swayed or manipulated by their choice environments. They might reason about probabilities in non-truth-tracking ways. And so on (Ariely Reference Ariely2010; Kahneman Reference Kahneman2013; Schwartz Reference Schwartz2016; Thaler and Sunstein Reference Thaler and Sunstein2009).
Many of the welfare-enhancing effects of markets are predicated upon agents knowing their own interests and taking effective means to promote those interests. But if agents reason poorly – falling prey to various fallacies or exhibiting choice biases – they might instead make suboptimal or harmful decisions. Economists and others often defend paternalistic regulation which is meant to protect agents from their own irrationality. If consumers or investors are systematically irrational, this might produce bubbles, systematic malinvestment, systematic underinvestment, harmful consumption, and so on, which might require government intervention to correct. Indeed, traditional arguments for fiscal policy often are predicated upon agents being overly cautious during a recession (Keynes Reference Keynes1937).
Externalities occur when some of the costs or benefits of a market transaction fall upon third parties. In an ideal market transaction, both parties are informed and free, and the costs of their decisions are internal. Under such conditions, a voluntary trade will take place only if both parties reasonably expect to profit, and so trades will be welfare-enhancing. But if a third party bears the costs, the trade could be welfare-demoting, or at least not properly account for the third party’s losses. Externalities can also include imposition of undue risk, not mere harm. Economists often argue that selfishly motivated agents will not account properly for externalities, and so regulation is necessary to prevent or reduce third-party harms or risks (Buchanan and Stubblebine Reference Buchanan, Stubblebine and Gopalakrishnan2000; Pigou Reference Pigou2002; Campbell et al., Reference Campbell, Converse, Miller and Stokes1960).
Pollution is an archetypical externality. When a consumer drives his car, nearly all of the cost of his air pollution falls upon others. Because that holds true for each of us, we overconsume car travel and overproduce car pollution.
Note that demonstrating a market failure exists or could exist – even a severe one – is not sufficient to show government should intervene, prevent it, or correct it through regulation. One reason might be that people have liberal rights which trump welfare considerations. For a cartoon example, suppose we demonstrate that joining religion R causes people to save too little, and that nothing can overcome this short of outlawing the religion. Here, freedom of religion might override any claim to regulation (Rawls Reference Rawls1971).
A second reason internal to economics might be that problems of government failure might outweigh the market failures. Perhaps a given government might be incompetent to correct the market failure, or the costs of correction exceed the benefits, or government agents given the power to correct that failure (or even failures in general) might use that power in bad faith for their own selfish ends. After all, many of the problems which give rise to market failure also give rise to government failures (Brennan Reference Brennan2012; Congleton et al. Reference Congleton, Grofman and Voigt2019; Datta-Chaudhuri Reference Datta-Chaudhuri1990; Furton and Martin Reference Furton and Martin2019).
3. The parity of democratic failure
Economists typically defend market regulation with a simple structure: identify a systematic failure mode, show that private ordering is unlikely to self-correct, and then argue that feasible interventions reduce the expected social cost without disproportionately infringing rights or creating worse government failures. Our central claim is that the justificatory framework commonly invoked to defend market regulation extends naturally to democratic decision-making. If systematic failures within a domain produce predictable social costs, and there exist feasible interventions capable of reducing those costs, then there is a prima facie case for regulation. We argue that democratic processes meet these same criteria. Indeed, the very failures that motivate regulation in markets occur – often more acutely – in voting behaviour and democratic decision-making. To deny this without also identifying a relevant difference is to apply asymmetric standards.
There general form of the argument is that if a domain D exhibits predictable failures, and if there are possible interventions R such that
${E\;[{\rm{social\;costs}}\;(D\;|\;R)] \lt E\;[{\rm{social\;costs}}\;(D\;|\sim \!R)]},$
subject to rights and feasibility constraints, then some regulation of D is warranted. Here ∼R represents the laissez-faire, unregulated condition.
Voting behaviour and electoral processes exhibit many of the same types of failures identified in debates over market regulation. There is a substantial literature documenting them and our aim here is not to demonstrate their existence. Rather, we argue that, once these failures are recognized, the standard reasoning used to justify market regulation applies with equal force to democratic decision-making. There should thus be as strong a presumptive case for political behaviour as a target of regulation as there is for market behaviour.
First, good governance itself suffers from public good problems. Indeed, this point is textbook economics – textbooks usually say that private agents would want to free ride on the provision of government itself and thus must be taxed. (Cowen and Tabarrok Reference Cowen and Tabarrok2021; Krugman and Wells Reference Krugman and Wells2021; Mankiw Reference Mankiw2017; Schmidtz Reference Schmidtz1991). Arguments for mandatory jury or military service, or compulsory voting, similarly rest upon variations of the public goods problem. (Hill in Brennan and Hill Reference Brennan and Hill2014). But similar remarks apply to voting itself.
Indeed, we should expect good governance to be underprovided for precisely the same reasons why a public good like clean air is underprovided (Freiman Reference Freiman2017). Suppose Claire is deciding between an electric car or a gas-guzzling SUV. Her individual purchase will make no meaningful difference to the overall condition of the atmosphere. Regardless of what she expects others to do, she has a self-interested reason to buy the cheaper gas guzzler. But other consumers are thinking the same thing; thus, too many gas guzzlers are purchased and clean air goes underprovided.
The same analysis applies to voting, including voting for better environmental policies. An individual vote for the more environmentally-friendly candidate will not change the outcome of the election. Thus, regardless of what she expects others to do, Claire has reasons to abstain from voting or to abstain from gathering the information needed to cast an informed vote. Of course, other citizens face the same incentives and thus too few informed votes are cast and good democratic governance is underprovided. We’ll briefly note that empirical evidence substantiates much of this analysis – citizens tend to be uninformed and biased about climate issues and policy in general because they are rationally ignorant (Arrow Reference Arrow1984; Caplan Reference Caplan2007; Hardin Reference Hardin2014; Somin Reference Somin2016; Stigler Reference Stigler1961).
Second, voting clearly suffers from information and asymmetric information problems. For one, empirical work on voter knowledge overwhelmingly finds that many to most voters are ignorant, not merely of the specific social scientific knowledge needed to form policy opinions, but of the most basic political information, such as general social trends, how their government works, what parties and candidates propose to do and who their incumbent election officials are and what they did while in office (Campbell et al., Reference Campbell, Converse, Miller and Stokes1960; Caplan Reference Caplan2007; Converse Reference Converse and Apter1964; Delli Carpini and Keeter Reference Delli Carpini and Keeter1996; Friedman Reference Friedman2006; Somin Reference Somin2016). While a small number are reasonably well-informed, most are either ignorant or systematically misinformed (Althaus Reference Althaus2003; Bartels Reference Bartels1996; Caplan et al., Reference Caplan, Crampton, Grove and Somin2013; Edlin et al., Reference Edlin, Gelman and Kaplan2007; Healy and Malhotra Reference Healy and Malhotra2010). The evidence generally shows they are poor at using heuristics and shortcuts to overcome these information deficits (Steenbergen and Colombo Reference Steenbergen, Colombo and Redlawsk2020).
While most voters have low information, most politicians and government officers have high information. Just as auto mechanics, used car salespeople, medical doctors, dentists, roofing inspectors, and other market agents could use their differential knowledge to exploit or defraud consumers, political parties and candidates could use their differential knowledge to exploit or defraud voters. For instance, since voters are generally incompetent to engage in retrospective voting, politicians are liberated to make campaign promises they do not intend to keep. Politicians can and do mislead voters. They can make backdoor deals or structure politics to benefit themselves at the public expense. They misrepresent causes of problems and potential solutions, or manipulate voters emotions.
Relatedly and more generally, principal-agent problems occur in democratic elections as well. In governments, realistically, politicians, bureaucrats, and others have a significant independence and only limited and attenuated oversight from voters. Just as the president of a company or the Gen-Ed committee of a university can use their appointed power for self-promotion, so can elected government agents.
Importantly, part of the reason these problems occur is that voters face the familiar collective action problems that lead to equivalent market failures. For instance, empirical work on voter behaviour finds that many voters before an election pay little attention to what candidates propose to do; they are often terrible at identifying the platforms of the candidates or parties they support (Achen and Bartels Reference Achen and Bartels2016; Althaus Reference Althaus2003; Arnold Reference Arnold2012; Mason Reference Mason2018a, Reference Mason2018b; Mason and Wronski Reference Mason and Wronski2018). Further, they pay little attention to what candidates do when in office (let alone what they could have done or what the effects were of what they did) and are generally terrible at engaging in retrospective voting (Achen and Bartels Reference Achen and Bartels2002; Achen and Bartels Reference Achen and Bartels2016; Arceneaux and Stein Reference Arceneaux and Stein2006; Healy and Maholtra Reference Healy and Malhotra2010). We might think that the bare minimum way voters should control politicians would be to vote for them on the basis of shared general policy goals and then, come next election, either reward or punish incumbents for their performance. But voters do not keep much track of what politicians do, and do not know how to attribute causality to politicians for the few things they do keep track of; this means the key mechanism by which politicians are held accountable to the public is broken. Democracy is supposed to work because politicians supply good performance in exchange for votes, but voters here are like consumers overwhelmed the worst pathologies of behavioural economics.
It’s an open question whether political competition would be most efficient if it mimicked competitive markets, or whether instead less than fully competitive political competition is best. Nevertheless, in many places, political competition is high constrained. For instance, in the United States, thanks to first-past-the-post-voting, only two parties have any real chance of winning any election. Further, government itself is by nature overwhelming monopolistic. All things equal, in markets, we expect reduced competition to lead to lower quality and higher prices; reduced competition between suppliers usually benefits suppliers at the expense of consumers. We should expect this applies to politics as well. If we think of the parties and candidates as suppliers and voters as buyers/consumers, then the party duopoly and government monopoly should reduce quality and increase costs. It should tend to benefit suppliers (elected officials and government agents) at the expense of consumers (voters).
Finally, democracies also suffer from obvious externality problems. Indeed, this is the key difference between markets and politics. Market decisions are usually and mostly internalized; negative externalities are seen as an anomaly to be corrected. Political decisions are by nature public. For instance, about 37% of the eligible voting public, and 26% of the entire population of the UK voted in favour of Brexit, but the effects of Brexit are borne by everyone else, including losing voters, eligible voters who abstained, children and other citizens ineligible to vote, future generations, and foreigners.
Or, consider again the mainstream explanation for the pathologies of individual voters. Voters are overwhelmingly low information and biased to engage in motivated reasoning. They suffer from intergroup bias, optimism bias, framing effects, confirmation bias, disconfirmation bias, and other problems; every flaw in consumers appears in voters. Political scientists and economists usually attribute these behaviours to the perverse incentives created by the collective action of voting. Because individual votes count for so little, voters have little individual incentive to become informed or think rationally; they have strong incentives to do otherwise.
Notice this entire mechanism is about externalities. Voters act this way because, thanks to a collective action problem, they can each externalize the costs of their ignorance and irrationality. The problem is similar to the pollution of individual automobile drivers or airline passengers. We drive too much and pollute too much because we bear the benefits of these actions but pass the costs onto others. Individually we matter little but collectively we matter a great deal. If externality regulation is prima facie justified in the case of pollution, it is prima facie justified in the case of voting. (Bartels Reference Bartels, MacKuen and Rabinowitz2003; Chong Reference Chong, Huddy, Sears and Levy2013; Erisen et al. Reference Erisen, Lodge and Taber2014; Kahneman et al. Reference Kahneman, Slovic and Tversky1982; Lodge and Taber Reference Lodge and Taber2013; Rasinski Reference Rasinski1989; Taber and Young Reference Taber, Young, Huddy, Sears and Levy2013; Tversky and Kahneman Reference Tversky and Kahneman1973; Westen et al. Reference Westen, Blagov, Harenski, Kilts and Hamann2006). Even in special cases where votes matter more, this problem remains. Recent work suggests that the odds of casting a decisive vote in a swing state may be as high as one in six million (Edlin et al., Reference Edlin, Gelman and Kaplan2007). Consider that the stakes of a presidential election include effects on billions of people worldwide resulting from policies concerning issues like climate change and war. Casting a decisive vote for the worse candidate, then, is disastrous.
It is plausible that the state may regulate democratic outcomes when they have a nontrivial chance of causing a disaster. By analogy, citizens have a right of personal property which entitles them to tinker with their car in their garage. However, this right of personal property does not entitle citizens to tinker with a nuclear reactor in their garage because the risk is too great. (For the sake of symmetry, suppose the risk of a nuclear detonation that would kill thousands and injure millions more is one in six million.) Similarly, the risk of casting a decisive but disastrous vote seems to justify regulatory oversight.
4. How to regulate
Each of the major market failures which supposedly justify government intervention appear in democratic voting and elections. Indeed, some of these failures are anomalies in markets but are baked into democratic elections. Accordingly, there is a prima facie case for regulating democratic voting with the same mechanisms used in market regulation.
Converting this prima facie case into an all-things-considered case requires a few more steps. First, we need to discuss how regulation might work, considering the possibility that regulation will fail, be too expensive, or make things worse. Note that the burden here, as with market regulation, is not to show that regulation will decisively solve all problems, but rather than it will perform adequately, with the benefits exceeding the costs. (We doubt most readers think that market regulation must be perfect and problem-free to be justified. They should apply this same standard here.) Second, we need to consider disanalogies and objections, including arguments which hold that people have a special right to engage in democratic failures free of regulation.
For the sake of argument, let’s presume that there must be certain guardrails for government intervention. To preserve liberal democracy, presume that universal, equal suffrage remains intact. There is one vote per person, no vote weighting, and no literacy or knowledge prerequisites. Suppose further that governments must remain largely viewpoint neutral, consistent with familiar liberal democratic constraints. Suppose that all interventions must be liberty-preserving as much as possible; when two interventions are equally successful, the better liberty-preserving one must be preferred. Suppose also that any good intervention must try to avoid political capture.
It’s worth noting up front that pretty much everyone already accepts some government actions which are plausibly seen as vote or democratic regulation. For instance, some issues are put directly to voters, while others are left to elected leaders, while others are left to judges and bureaucracies, and still others are removed from political consideration entirely. The timing and place of elections, who is permitted to vote (at what age), who is permitted to run for office, and so on are kinds of regulation. Government funding of public education is in part meant to be a non-laissez-faire subsidy meant to increase voter competence. Many readers are likely comfortable with government regulation of campaign donations, campaign expenditures and even which kinds of speech are permitted. Probably almost all readers reject straight up markets in votes (Freiman Reference Freiman2014).
Each of these things is a kind of government regulation of democracy which inhibits laissez-faire democracy. This claim should not be seen as sneaky on our part; after all, consider how many papers exist which argue that, say, judicial review, bills of rights, or the separation of powers are undemocratic (Waldron Reference Waldron2005). We don’t regard them as undemocratic per se, but they are ways to regulate democracy. Other interventions to correct democratic failures, such as funding of public education, are not regulations per se.
In what follows, we provide a brief sketch of some regulation strategies. Our aim is not to provide a comprehensive account of the technical details, but rather to suggest that such regulation is roughly as feasible as market regulation and permissible on the same grounds. We do not hang out argument on any particular proposal. Our goal is more to illustrate how the interventions that correct market failures have analogous interventions for democratic failures.
Consider the problem of public goods. The standard market ‘fix’ is to tax, compel, or provide subsidies to ensure provision. The democratic analogue, which would preserve equality, would be to create participatory incentives, such as stipends for voting or taxes and penalties for non-voting. It could include some sort of reward (or penalty) system for engaging with low-burden information deliveries, such as nonpartisan voter guides.
With regard to information asymmetries, the standard market fix is to have mandatory disclosure and labelling laws – such as nutrition and ingredients lists on food – as well as licensing providers (e.g., medical doctors). Governments could require standardized, independently audited candidate disclosures. Governments could require public registration of campaign promises, which are then monitored and fact-checked by independent boards. Access to public debates and public funding of campaigns could depend on compliance with transparency rules.
The standard fix for principal-agent problems is to require and monitor fiduciary duties with third-party auditing. Here, the democratic analogue would be to have public promise trackers with sanctions for deceptive claims, such as fines or media scorecards. Public performance scorecards – such as promise-keeping – could determine eligibility for public campaign funding.
The standard fix for problems of bounded and limited rationality is to control the choice architecture and change the default rules. The democratic analogue would be neutral language and uniform ballot designs. Questions and candidates should be listed in randomized order with plain-language summaries. There could be automatic delivery of voter guides and automatic voter registration with opt-out clauses. Ballots could quiz citizens of their preferred policies and map them onto the registered policy-platforms of parties and candidates.
The standard fix for problems of externalities is to impose Pigouvian taxes, quotas and caps, or pollution and emissions standards. The democratic analogue might to be to have narrow output safeguards for certain democratic decisions. This could include requiring supermajorities for some decisions, judicial review for others, or subjecting some democratic decisions to independent expert review with some sort of veto capability that could later be overturned with a supermajority.
The standard fix for problems of limited competition is to impose antitrust rules and to ensure platform neutrality. The democratic analogue would be to have great ballot access equalization, and more transparent and neutral inclusion rules for debates.
Another way to categorize the kinds of interventions that in principle are justifiable is to consider the difference between regulating inputs into the democratic process – such as distributing information and changing incentives – versus regulating and controlling the process or the outputs. Input regulations could include universal nonpartisan, plain-language summaries of candidates’ positions and documented legislative behaviour, which are delivered automatically (though postal and digital means, with public auditing of accuracy and neutrality. It could include participation incentives, such as a subsidized Deliberation Day holiday. It could include financial rewards for citizens who can pass a voluntary exam on basic civics knowledge; this exam would not affect the right to vote, but would simply pay citizens to become informed.
Process regulations could be used to increase transparency and accountability. There could be promise and disclosure registries, where candidates file commitments and factual claims with appropriate sources. Independent auditors could flag discrepancies. Ballot design rules could improve readability and reduce problems from framing effects. There could be greater time, place, and manner restrictions on political advertisements, with perhaps greater requirements to certify factual claims. Political advertisements could be regulated more like drug or automobile advertisements.
Finally, there could be narrow output regulations, such as checks against catastrophic risks. Perhaps there could be time-limited, judicially reviewable expert panels empowered only to delay (if not void) decisions that meet some statutory-defined catastrophic-risk threshold. These delays would then trigger mandatory nationwide information broadcasts and a second voting decision which requires a supermajority. Other guardrails could include fixed terms for laws, cross-partisan appointment of bureaucracies, and sunset terms for spending, regulations, and interventions.
Evaluating any one of these proposals at length would require multiple papers. But our goal here isn’t to defend any particular proposal. Rather, our point is to demand parity of reasoning. There are already thousands of papers evaluating just these same interventions as fixes for market failures. Most governments in fact impose just these sorts of interventions to correct market failures. Our point is that what is good for the goose is good for the gander. These same interventions seem at least prima facie appropriate, for the same reasons, for the analogous problems in democratic performance.
5. Objections and replies
We foresee four principal objections to our proposal. First, it is impermissible in principle to regulate votes. Second, vote regulation is unnecessary because voting itself is a form of regulation. Third, market regulation and voting regulation are asymmetrical given that the state is external to the market and thus state actors may have less of an incentive to bend market regulation to their own advantage. Fourth and relatedly, vote regulation is infeasible because no institution is sufficiently trustworthy to be assigned the task. Below we consider each objection in turn.
5.1. Voting is exempt from regulation because votes are human rights
We suspect that most readers’ initial objection to our proposal is simply that voting is, in principle, exempt from regulation. For this objection to succeed, it must identify a reason that excepts voting from regulation but not market activity.
As a first pass, consider the view that voting is human right or a basic liberty. Perhaps this status exempts it from regulation. The problem with this argument is that other human rights are subject to regulation and intervention. Consider, for example, bodily autonomy. Defenders of vaccine mandates argue that the state may require vaccination to provide the public good of herd immunity. Many also accept that military service may be mandated in special or even common circumstances. Bodily autonomy is a basic liberty on a moral par with the right to vote but it may nevertheless be restricted for certain purposes.
Granted, vaccine mandates and national service are controversial cases. But the argument generalizes. Occupational choice is a basic liberty but, aside from hardline libertarians, few believe this liberty entitles someone to practice medicine without a license or work for less than the minimum wage. Freedom of the press may not justify an unregulated freedom to run political advertisements or spread military secrets.
The core idea is that even basic freedoms and human rights are limited in scope and weight. Liberals typically argue that citizens need sufficient freedom to pursue their own conception of the good, not unrestricted freedom. Sufficient freedom is consistent with regulation. However, this point carries over to the freedom to vote. Just as citizens don’t need unrestricted freedom of occupational choice, they don’t need unrestricted freedom to vote.
In reply, one might argue that these cases aren’t analogous. A single, high-risk physician can produce definite harm for particular individuals. By contrast, a single, high-risk voter cannot because individual votes don’t make a difference.
Yet this objection does not show that voting should be exempt from regulation. Consider a different case: fuel economy regulations for cars. A single inefficient car makes no difference to the overall condition of the environment. However, many do. Thus, states regulate the collective because the collective makes a difference. While the right to own personal property and to choose one’s occupation are considered basic liberties, this consideration does not forbid restricting people’s right to own fuel inefficient cars or work at a dealership that sells them. Indeed, many arguments for the regulation of suppliers or consumers are grounded not on the individual harms caused by single agents, but on the problems of systematically bad effects caused by the collective.
We will also spotlight a tension between the claim that individual votes don’t matter and the claim that regulating votes is an impermissible restriction on citizens’ liberty. If your individual vote doesn’t change your life in a consequential way, it’s hard to see why an unrestricted freedom to vote (in an inconsequential way) would receive stronger protection than other freedoms that do change your life in highly consequential ways, such as freedoms concerning what you may buy and how you may work. Arguing that individual votes do not matter makes it harder to see why votes would be exempt from regulation; one might think instead it is easier to justify intervention.
Some might argue that democratic regulation is ‘undemocratic’. This move seems a non-starter in other analogous contexts. Imagine a critic of market regulation claimed that markets are exempt from regulation because regulation is ‘anticapitalist’. Calling something ‘undemocratic’ is not a magic barrier to justifying it any more than calling something ‘anticapitalist’.
Second, it is unclear why regulating votes is ‘undemocratic’ any more than most other kinds of things that already regulate democracy. Governments already provide education, which strongly influences voter behaviour and ideology, yet few democrats claim that this is undemocratic because it gives some people greater influence than others, it enables governments to manipulate citizens, or affects democratic outcomes. Zoning, districting, voting rules, the presence or absence of representatives, the kind of constitution, and so on, all not only affect outputs, but modify and constrain inputs. Yet few other than some radical direct democrats think these are ‘undemocratic’. Many of these rules also reduce equality in some way – a senator has more power than a layperson – but most readers regard representation as democratic.
One might try to put meat on the bones of this objection by saying it would create objectionable inequality, as regulators would have more power than voters. However, it’s unclear how persuasive this objection is when we apply it to different contexts. For example, many economic egalitarians favour strong government regulation of the economy. In practice, this means regulatory boards have far more power than voters or consumers over the economy. Even in a world where all incomes are equal, a regulator has more economic power than a consumer. Yet most democratic theorists regard this regulation of the economy as democratic because the regulatory boards answer in part to voters. Similarly, then we might say that under our proposal, regulatory boards regulate voters, but voters also have regulatory power over those boards. It is a system of mutual checks and balances rather than an oligarchy of regulators. Again, we insist on keeping the same standards of argumentation in both cases.
At any rate, the instruments we propose preserve formal political equality and function as time, place, manner rules on the environment of choice. We did not defend disenfranchisement, unequal weights in voting, or knowledge tests.
5.2. Democratic voting is itself a form of regulation
One might object that democratic voting is itself a form of regulation. The thought here is that voting is an effective mechanism for holding public officials accountable. If an official performs poorly, they can be voted out. Thus, this argument alleges, further regulation of the sort we’ve been discussing is unnecessary. We don’t need a Public Goods Commission (for example) because people will vote out officials who fail to efficiently provide public goods.
We agree that voting is itself a form of regulation. But note that, by parity of reasoning, market competition is also ‘self-regulation’, yet we still correct predictable failures with environmental rules. Elections can discipline officials but do little to discipline voters’ information environments; that is precisely where the parity-based instruments operate.
For this objection to succeed, however, it would need to resolve the problems with voting behaviour discussed above. After all, there remain rampant externalities, information asymmetries, principal-agent problems, and the like, all of which are well-documented in a robust and long-standing empirical literature. Pointing out that democratic voting is a kind of regulation is correct, but it does not make those issues vanish. Further, the scholars working on these problems work on them in large part because these are barriers to making elections work as well as they ideally could for the common good. For instance, if voters are systematically uninformed or if they are bad at retrospective voting, this reduces the degree to which elections serve to regulate democratic outcomes.
5.3. Democratic regulation and market regulation are not symmetrical
A third objection begins with the observation that the state is, in an important sense, external to the market. Consequently, we may have reason to believe that political actors have less of an interest in producing certain market outcomes compared to producing certain political outcomes which could be personally beneficial. Thus, we should expect voting regulation to be more dysfunctional than market regulation.
While the state is indeed external to the market, it’s critical to recognize that state actors can – and in practice do – have a vested interest in producing market outcomes just as they can have interests in producing political outcomes. Consider three cases that illustrate the point.
First, a politician may pursue subsidies for a particular industry in exchange for campaign support. For instance, it’s plausible that Florida sugar growers receive subsidies, not because it’s best for the economy (economists almost universally think otherwise), but because officials that support such subsidies have more electoral success than those that do not, all else equal (Lopez Reference Lopez2001).
Second, consider the so-called ‘revolving door’ issue in politics, whereby former legislators and regulators move to roles in the private sector that they previously oversaw (and, alternatively, those in the private sector may move into roles that involve regulating their former industry). To take one example, research indicates that patent examiners grant more patents to companies that would later hire them (Tabakovic and Wollmann Reference Tabakovic and Wollmann2017). Now, the claim is not that these arrangements involve any sort of direct quid pro quo (although there’s some suggestive evidence of favouritism), but the broader point is that the revolving door phenomenon creates the opportunity for corruption.
Third, politicians and bureaucrats themselves often have investments and side businesses; they thus often have selfish incentives to regulate markets in certain ways. A robust empirical literature finds that their stock portfolios greatly influence how they vote (Carr Peterson and Grose Reference Carr Peterson and Grose2021; Griffin and Anewalt-Remsburg Reference Griffin and Anewalt-Remsburg2013; Grose Reference Grose2013; Ziolkowski Reference Ziolkowski2021).
In the three cases above, public officials may use their power to regulate the rules of the economic game to their own advantage. Consequently, symmetry remains: if worries about public officials’ incentives speak against democratic regulation, they also speak against market regulation. Regulatory officials face perverse incentives in both market and political domains. Thus, the correct comparison is comparative capture risk with anti-capture design. We recommend building in cross-partisan appointment, budgetary independence, open data, judicial review, standing for civil society to challenge decisions, randomized audits, and sunsets. If these features make market regulation acceptable, parity suggests they can make democratic regulation acceptable too – empirical burden of proof applies on both sides.
5.4. Good regulation is infeasible
A related objection notes that the regulation of votes is likely to suffer from a variety of practical problems. For example, we should worry that the regulatory body will be biased or discriminatory. Particular forms of vote regulation may also be inegalitarian, as those in poverty will have less opportunity to acquire political information. Furthermore, an agency that regulates votes is a tempting target for special interests to capture.
Our response, in brief, is to grant that all of these problems are troubling. But these are empirical worries, not principled defeaters, and they apply just as much to market regulations and interventions. We propose random-control trial testable instruments, such as guides, deliberation stipends, and promise registries. Each has measurable outcomes (issue knowledge, roll-off, retrospective voting quality, deception rates). We also recommend having built-in ‘exit conditions’: regulatory interventions should sunset automatically unless they clear pre-registered performance thresholds and pass disparate-impact checks.
Our goal here is not to show that any particular regulation is justified all things considered. Rather, we are demanding symmetry. The reasons that speak in favour of market regulation also speak in favour of vote regulation.
There is social scientific evidence that others forms of regulation involve bias and discrimination (McLeod and Botterell Reference McLeod, Botterell, Gheaus, Calder and De Wispelaere2019; Mueller Reference Mueller2003). Insofar as this is a reason to reject vote regulation, it is a reason to reject other forms of regulation as well. Moreover, this objection only targets the misuse of regulation – it would not show that regulation, properly implemented, is impermissible.
A similar point applies to the inequality objection – those in poverty have less opportunity to acquire a license to practice medicine or pharmaceutical distribution. Fuel economy standards raise car prices, which means that it is harder for the poor to comply. (In India, for example, banning zero-safety-star cars induced poor consumers to substitute even more dangerous motorcycles rather than more expensive one-star cars.) Occupational licensing laws, zoning laws, and workplace regulations tend to inhibit the poor, but not the rich, from starting and owning businesses. Here again, insofar as this is a reason to reject vote regulation, it is a reason to reject other forms of regulation as well.
6. Conclusion
We have argued for parity: if standard market failure arguments justify some equality-respecting regulation of markets, the same structure justifies some equality-respecting regulation of democratic production. The hard questions are comparative and institutional: which regulatory instruments reduce predictable democratic failures at acceptable rights and capture risk costs? That is an empirical programme we can – and should – pursue with the same humility and rigour that guides serious work on market regulation. If you endorse the latter, consistency demands openness to the former.
Acknowledgements
The authors thank two anonymous referees and audiences at the University of St. Andrews and Stanford University for helpful comments and feedback.
Jason Brennan is Robert J. and Elizabeth Flanagan Family Professor of Strategy, Economics, Ethics, and Public Policy at Georgetown University’s McDonough School of Business and Editor-in-Chief of Philosophy & Public Affairs. He is the author of more than twenty books, including Against Democracy and Democracy: A Guided Tour. His research focuses on political philosophy, democratic theory, applied ethics, and the moral foundations of markets.
Christopher Freiman is Professor of General Business and Chair of the General Business Department in the John Chambers College of Business and Economics at West Virginia University. He is the author of four books, including Unequivocal Justice and Why It’s OK to Ignore Politics. His research focuses on political philosophy, distributive justice, democratic theory, and the ethics of political participation.
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