Analogy with the private sector
Matsusaka (2004), pp. 130-131:
There are two main ways of controlling agency problems. First, the principals can try to get the agents to make the right decisions by careful screening and design of incentives. For example, in the private sector managers try to hire employees who admire the firm’s products and goals (screening), and firms offer profit-sharing plans, stock ownership, and promotion based on performance (incentives). In the political sphere, voters try to select agents who they believe share their values and goals (screening) and they use the possibility of reelection to provide incentives: incumbents who do a good job are given another term in office and unsatisfactory representatives are thrown out (Peltzman 1998).
A second way to control agency problems is for the principals to reserve the right to overrule their agents. In the private sector, the principle almost always retains this right. When a manager delegates decisions to subordinates, it is understood that he or she can step in if the decision is unsatisfactory. The initiative is the political version of the principal’s right to overrule the agent. If elected officials behave unfaithfully, the voters can intercede and implement their desired policies directly.
A real partnership
The National Citizens Initiative For Democracy will resolve intrinsic flaws in our present, purely-representative form of democracy by bringing the People into the operation of government as lawmakers, i.e., by creating a Legislature of the People, which will work in parallel with the legislatures of our elected representatives. This partnership in democracy, manifest in these two legislative organizations, the People and their representatives. will serve the People’s interest far better than could either one of them working alone.
While the Legislature of the People established by the National Initiative will not entirely eliminate the shortcomings of our elected legislatures, it will substantially mitigate them. Under the terms of the National Initiative, the People will, for the first time in history, have a legislative voice equal to that of our elected legislatures with respect to statute law and superior to that of our representatives with respect to constitutional law. The significance of this fact will not long be lost on our representatives. They will quickly realize that the new legislative authority institutionalized by the National Initiative places the People in a position to curb their authority if they, our representatives, do not consistently act in what we feel is our best interest. Thus, the very human nature that has hitherto impelled our representatives to subordinate the wishes of their constituents will now make them think twice should they ever consider enacting legislation that the majority does not support.
While our elected legislatures and the Legislature of the People share certain fundamental authority and responsibility, they have very different inherent strengths and abilities, and each therefore provides us with unique benefits. For example:
- As a direct result of the balanced public information programs and deliberative procedures established by the National Initiative for each qualified initiative, citizens will come to better understand the consequences of various public policy and legislative alternatives than they do under our present system. Over time, this will enhance the People’s ability to render wise legislative decisions and contribute to the maturity of the electorate.
- The Legislature of the People provides for the direct expression of citizens’ actual views on issues in the form of votes for or against each initiative in an election. In contrast, our elected representatives have no effective means of reliably determining the views of their constituents.
- The Legislature of the People, which consists of millions of Americans, is ill-suited to perform governmental functions that require substantial interactive communication and technical knowledge. Examples of such functions include creation of annual governmental budgets, negotiating the terms of international treaties and contracting with private parties for services. Our elected legislatures have two hundred years of experience and established procedures for dealing with these situations.
- The nuts and bolts of governing a nation involve a plethora of workaday administrative decisions, embodied in law, many of which are not of sufficient interest to the general population that they would result in an initiative being proposed by the Legislature of the People. These mundane forms of legislation are precisely the kind that we can safely delegate to our representatives.
- The Framers of our Constitution wisely embedded a set of checks and balances within the structure of government. Among the principal duties of the Congress is monitoring the executive branch to ensure its compliance with the nation’s laws. Our representatives in Congress, who have the ability to form investigative committees and compel testimony, and who are assisted by Congress’ capable investigative arm, the General Accounting Office, are far better able to fulfill this responsibility than the Legislature of the People.
The partnership in democracy that will be created by the National Initiative has immediate advantages over either a purely representative or purely direct form of democracy. It is reasonable to expect that, during the first several years after enactment of the National Initiative, a better understanding of the preferred division of labor and authority between the two legislatures will gradually emerge, based on actual experience.
Edit history
2002 – Written by David Parrish and Senator Gravel, edited by Michael Grant
Jun 2008 – Edited by Joshua Pritikin