The Myth of Democratic Failure: Why Political Institutions are Efficient.

• Author: Yoon, Yong J.

By eliminating Plato, economists have already achieved a lot in improving our understanding of political process. Buchanan and Tullock initiated the interpretation of political process as exchange of interests (and values) rather than search for truth. In this book Wittman attempts to remove David Hume. Wittman asserts that democratic polity is as efficient as the economic market and proposes an efficiency hypothesis of political market. The author makes interesting arguments that deserve attention, but has failed to solidify the issue.

First, the author does not recognize the fundamental difference between market and political processes. A market involves bilateral (unanimous) exchanges; a political process involves complex exchanges. A market for political services involves the question of legitimacy as well as efficiency.

Now, for the sake of argument, let me accept his assertion and examine the implications. A democratic political market is efficient. Thus all we can do is to improve the management. This leads to a question of importance in political philosophy. David Hume asks whether there is any essential difference between one form of government and another - is whatever is best administered the best? Hume's conclusion is that the constitution matters. In this respect, Wittman's argument gives in to an evolutionary theory of political system. Efficiency can be discussed within the given framework of constitutions that restricts political processes. Wittman's efficiency hypothesis belongs in this category.

To justify his efficiency hypothesis, Wittman examines factors of market failure factor or the players in the political market: voters, bureaucrats and interest groups. Wittman emphasizes the role of candidates. Down's "Rational Voter Ignorance" is discussed in detail. Nobody collects the necessary information in Downs. In Wittman all necessary information is collected by the voters or provided by candidates. This argument has merit by introducing endogeneity in political processes; Wittman considers the supply side of political services (candidates) as well as the demand side (voters).

But Wittman's argument leads to another extreme regarding the opportunism of elected officials. He argues that self interest leads to efficiency. He argument is largely based on the politicians' concern about reputation. Again, political markets work differently from economic markets. As Hume says, "Honor is a great check upon mankind: But when a...