Resumen de Democratic institutions and happiness
The present thesis will attempt to study, in a theoretical way, a set of questions that traditionally arouse in the field of political economy; in the branch of the economic discipline that is, by definition, situated in the intersection of the economic and political science. Is the demand for democracy and political communication among citizens related in some way? Are the traditional cost-related reasons enough to explain why democracy is not extensively observed in the majority of the decision making procedures of a society? Do referenda just by existing as an option in the authority's choice set, influence the authority's re-election probability? Does social happiness depend, just, on the implemented policy alone or in other features of the political environment as well? By the means of the solid scientific methodology of positive analysis, the three self-contained but, despite that, interdependent chapters of this thesis shall build separate mathematical models and will provide intuition and formal results to all addressed questions.
The second chapter, in specific, models the constitutional design process, and points out the importance of political communication (defined as the level of information about the social distribution of policy preferences that individuals hold, at the time of this process) on the "extent" of "democratic restraints" of the socially preferred constitution and on the welfare derived by the society from its implementation. The results demonstrate that the level of political communication has a positive effect on the level of democracy of the socially preferred constitution and on social welfare. Moreover, it is proved that, even if there exist no tolerance for dictatorship by societies in general, the level of democracy demanded by the society, reaches the maximum possible level, only if political communication is "perfect". That is, the socially preferred constitution in cases of "imperfect" political communication incorporates both dictatorial and democratic elements.
The third chapter focuses on a specific democratic institution; referenda. It is self-evident that the result of a referendum delivers a significant amount of information about social preferences to each composite member of the society. This chapter argues that, beyond this obvious fact, the choice not to offer a referendum by an authority, although permitted to do so, may enhance as well the information individuals posses about social preferences. The addition of a referendum option in the rules of a game, that is, by enabling the authority to offer referenda at will, results in an assured re-election of authorities that implement socially beneficial policies, and in a decrease of the re-election probability of authorities that implement socially obnoxious policies. In a sense, by allowing an authority to offer referenda, an inescapable Catch-22 is introduced in the game, which inhibits the re-election of a measure of "bad" authorities and, thus, confirms that one of the main benefits of a democratic institution is the preservation of "good" authorities in power.
The fourth chapter studies the level of happiness of an individual who accepts the consequences of authoritative policy decisions. The level of happiness of such an individual should be studied in a whole different way from the standard utility approach. This chapter proposes a way to study happiness at a theoretical level, from an economics oriented set of basic assumptions and goals. The basic idea, that inspires the formal description of happiness, is the importance of awareness of policy and decision rule alternatives. Building, on a solid set of traditional assumptions, the model investigates how the introduction in the awareness of the society of new policies or new decision rules, influence the individual and social level of happiness and, thereafter, the optimal policy choices of an ideology oriented authority. The main result, indicates that a change in the policy (or decision rule) awareness on behalf of the society might lead to a direct alteration of the authority's implemented policy, that is, if the society becomes aware of a better policy (in social terms) than the one implemented today, the authority might need to implement something better for the citizens, even if this new policy assigns a lower utility level to the authority.
