The Limits of Institutional Design

1
The Limits of Institutional Design

• Francis Fukuyama
• Johns Hopkins School of Advanced International
  Studies

2
Presidential/PM v. Electoral Systems
Plurality
PR
US, Philippines
Presidential
Latin America
Continental Europe
Parliamentary
Westminster
3
Participation v. speed of decision-making
(Buchanan and Tullock)
Expected Decision Costs
Percentage of population required to make decision
4
Types of veto gates

• Electoral system
• PR/plurality, district size, thresholds, timing
• Party discipline
• Open v. closed list PR, campaign finance
• Bicameralism
• Federalism and decentralization
• Independent Judiciaries

5
System Rankings

• Classic Westminster
• Parliamentary/PR with strong parties
• Premier-presidential
• Presidential with plurality voting
• Parliamentary with fragmented parties
• Presidential with fragmented parties

6
British Election Results, 2001
7
Successful Institutional Reform

• Electoral systems
• Chile 1988, Japan 1994, Italy 1994, New Zealand
  1996, Thailand 1997
• Federalism
• Brazil, Fiscal Responsibility Law (2000)

8
Conclusions

• No such thing as an optimal political system
• Institutions come in complex, interdependent
  packages
• Good institutions heavily dependent on local
  context and traditions
• Need to invest in local knowledge of institutions
• Leadership matters
• Formal institutions matter less than many think