My purpose in this article is to develop a theory of political dysfunction as it relates to constitutional drift--the tendency of de facto political procedures to change when these procedures are no longer incentive compatible for wielders of political power. Importantly, the term constitutional drift refers to informal constitutions--that is, the state's actual decision procedure, with drift the unintended result of political bargains among political elites. As such, formal "constitutional moments" or revisions are not covered under this category. My exploration is theoretical, using tools of economic and political theory to explain how in the ordinary course of governing the institutions of governance may undergo organizational change such that the governors no longer have access to the knowledge necessary to govern in a generally beneficial manner, even assuming they wish to do so.
The term political dysfunction may be normatively charged, but I believe it is capable of doing positive analytical work in helping us to understand the state of currently existing governance institutions in the Western constitutional democracies. For clarification, by "political dysfunction" I do not simply mean "outcomes we do not like," although this certainly is a part of such dysfunction. I instead argue that political dysfunction is best understood as an institutional malady. In particular, it describes constitutional drift resulting in a particular structure of governance institutions that lack important self-correcting (negative-feedback) mechanisms. Alternatively, political dysfunction lies in political institutions' failure to cope with the "knowledge problem" (as in, e.g., Hayek 1960, 1978-81; see also Oakeshott 1991) as applied to the political process. It is thus complementary to but conceptually distinct from schools of thought that emphasize "incentive problems" in politics--namely, the Virginia School of political economy (e.g., Buchanan and Tullock 1962; Buchanan 1987). A concrete way to conceptualize the distinction is to recognize that constitutional drift frequently has its roots in incentive problems--incentive incompatibility between the welfare of political elites and the welfare of those subject to their rule (Salter 2015a). This incompatibility in turn leads to a reordering of political structures such that these structures are less capable of coping with the knowledge problem. Political dysfunction is the conjunction of the incentive problem and the knowledge problem. I take the former as my point of departure and focus analytical efforts on the latter, showing the nature and importance of political dysfunction in the context of the American republic. (1)
Political dysfunction so conceived concerns those continuing James M. Buchanan's (1975) project: enabling the protective state and the productive state while enfeebling the predatory state. Political dysfunction culminates in political institutions' increasing difficulty in generating reliable informational feedback, and hence the erosion of mechanisms for correcting errors. This means that effective means for enforcing property rights, upholding the rule of law, and providing public goods--all abstract desiderata that require institutional context for navigating the trade-offs involved--will increasingly be difficult to discover, while political processes fall prey to intergroup expropriation and rent seeking. Errors in the political process will be not only difficult to correct but also difficult to identify in the first place. The sense in which I use terms such as mistake and error should be thought of in this means-ends framework rather than as relating directly to normative goals. In this approach, I am building on the foundation laid by Austrian political economy (Mises 1951; see also Ikeda 1997, 2003), for which means-ends analysis of political process, from the perspective of information compatibility, is essential.
Seminal theories of political dysfunction come from James Madison and Alexis de Tocqueville, although they did not employ this exact terminology. Madison worried about the tyranny of the majority, Tocqueville about a paternalistic mild despotism. These arguments concern the erosion of political institutions, a version of what I have called "constitutional drift." In addition, these authors worried that the political forces that bring about these institutions will not subsequently relent. This is clearly a vision of undesirable end states that are not self-correcting. However, it is sometimes difficult to ascertain whether these problems are in essence ones of outcome or ones of process. In other words, it is unclear whether the end state is inherent in the initial setting of the metarules as opposed to constitutional novelty arising from bargains in an environment of genuine uncertainty. In reality, both play a role, but the relationship between process and outcome in a theory of political dysfunction might be more fully specified. Furthermore, these processes implicitly contain a mixture of incentive problems and knowledge problems. It is not problematic that these frictions are entangled--in political dynamics, they are necessarily so--but we could benefit from a more rigorous theoretical paradigm that (a) places a conceptual boundary on these two kinds of problems and (b) specifies the properties and implications of each. My theory of political dysfunction identifies the boundary between information and incentive problems. It also highlights the difficulties associated with political institutions whose information feedback is diluted. (2)
Before proceeding, I want to state clearly that here I do not treat political dysfunction that is attributable to conscious constitutional change, such as the Seventeenth Amendment to the U.S. Constitution, which provides for the direct election of senators (Zywicki 1994). I instead focus on the morphing interpretation of existing constitutional restraints, such as Charles Warren's (1932) treatment of Congress and the General Welfare Clause. Also, I do not argue that all constitutional drift has injurious consequences. Counterexamples abound. For example, the transformation of Great Britain under the Stuarts from an absolutist state to a de facto limited government that credibly committed to protecting property rights and upholding the rule of law was a constitutional change that many look upon favorably (North and Weingast 1989). I limit myself to constitutional drift that results in deleterious consequences for the purpose of building a theory of political dysfunction. That the former can result in the latter does not mean that it must.
In the next section, I provide an on overview of constitutional drift as rooted in constitutional bargains among political elites. Understanding this bargaining process is necessary to set the stage for analyzing currently existing governance institutions and hence political dysfunction. I then focus on developing the theory of political dysfunction proper, showing its necessary relation to feedback erosion that follows from the "tragedy of the commons" in governance. As an illustration of the theory, I consider the case of fiscal imbalances in the American republic, showing how these imbalances are simply one way in which political dysfunction manifests. I conclude by discussing some implications of my theory as well as the costs and benefits of some possible remedies.
Constitutional Bargains and Constitutional Drift
Constitutional drift is the necessary starting point of my theory. In the United States, it is almost self-evident that there has been a significant amount of constitutional drift since 1789. The resemblance between the existing de facto Constitution and the original de jure Constitution is tenuous at best (Greve 2012; Epstein 2014). This slight resemblance is explained by a series of constitutional modifications that took place outside the official procedures for amending the U.S. Constitution, the most notable being the New Deal. Although it would be a mistake to reify the New Deal as a complete break with the previous constitutional tradition, it nonetheless remains the singular event that characterized the restructuring of U.S. political institutions. What had previously been, in an ideal-typical sense, best characterized as a system of polycentric federalism (V. Ostrom 1997,  2008a,  2008b; see also Buchanan and Tullock 1962) has since evolved into a system of monocentric nationalism. As Michael Greve (2012) explains it, "competitive" federalism has been replaced by "cartel" federalism: genuine competition between jurisdictions in the provision of governance services and other collective goods has ceased, and local administrative bodies are largely implementation bureaucracies for plans devised in Washington.
I want to emphasize that for the purposes of this paper I attach no primary normative significance to constitutional drift. There were and continue to be powerful arguments justifying the drift and the final state of affairs; there were and continue to be powerful arguments against them. I do not wish to engage this issue here. I take as my starting point that constitutional drift--both in the United States and in political regimes throughout history--exists as an important phenomenon for study, and I focus on drawing out its implications.
As hinted earlier, constitutional drift always centers around the de facto constitution--that is, the actual balance of power, reflected in political structures and procedures, between the One, the Few, and the Many. De jure constitutions--formal or written constitutions--can reflect this actual balance, but not necessarily. De jure constitutions can be binding only if the structure they elucidate is self-enforcing (Lara, Greif, and Jha 2008; Leeson 2011; Mittal and Weingast 2013). This does not mean that de jure constitutions are superfluous. They can be extremely useful...