(This essay was published in Hong Kong Economic Journal on 7 January 2015.)
“One person, one vote” is one of the great inventions of the modern world. The principle of equal human rights, propounded by the Enlightenment philosophers in the 18th century, has served as the moral and political foundation of democratic governments and elections ever since. But can today’s practical political problems still be solved by delegating power to democratically-elected representatives to make political choices on behalf of the people
In Hong Kong, political gridlock has inflicted our political processes and stalled numerous public policies and projects. The pan-democrats blame this gridlock on the lack of fully democratic political arrangements. The establishment in turn blames the pan-democrats, and some blame the recent progress made towards democracy.
But even mature democracies are suffering from political gridlock. Different groups disagree, often vehemently, over the merits and demerits of many public policies and projects such that many are not approved, or approved with so many amendments as to compromise or distort their original intentions, sometimes beyond recognition. Delays, compromises, and distortions give democracy a bad name. They are certainly not in the public’s interest.
How then should a city decide when to implement public policies and projects that people are clamoring both for and against? And how should government and politicians decide how to weigh the views of supporters and foes over a proposed public policy or project?
Polling might help, but polls don’t aggregate the strength of people’s preferences. They give equal weight to a passionate advocate or opponent and to a person who doesn’t really care.
Many democratic states let voters decide big questions, such as abortion rights and same-sex marriage, through ballot referendums. But this kind of direct democracy is controversial. The problem is that an indiﬀerent majority can outvote a passionate minority. Moreover, the voting outcome is often influenced heavily by recent events that sway indifferent voters one-way or another.
Consider the polling outcome of the “Occupy Central with Love and Peace 6.20-29 Civil Referendum” which returned close to 800,000 valid votes in support of allowing the public to nominate candidates for the 2017 Chief Executive election. In opposition, “The Alliance for Peace and Democracy” launched a signature campaign during 7.19-8.17 to protect universal suffrage and counter the Occupy Central movement. At the end of the campaign it collected a total of over 1.5 million signatures.
Although neither exercise constituted official voting, still, how would one reach a conclusion on their outcome? Many people probably voted (or signed) without a strong stake in the outcome. By contrast, the issue was of considerable signiﬁcance to the minorities on both sides of the political divide. If the minorities care a lot, and the majority cares a little, it is not obvious that the ordinary “one person, one vote” rule tells us what is the true balance of thinking.
Common belief suggests that the near 800,000 who voted in the Occupy Central poll were probably heavily influenced by the release of the white paper on the practice of the “one country, two systems” policy in Hong Kong. As a consequence, the vote count might not be robust.
Economists have given a lot of thought to the problem of aggregating people’s preferences, taking into account their intensity. An economist at the University of Chicago named Glen Weyl recently developed an ingenious new mechanism that is simple and robust to implement. It is designed to help a government decide whether to introduce a new policy or project. He calls it Quadratic Vote Buying (QVB) and it works like this.
Consider three persons, Ann, Bo, and Chou. The government is trying to decide whether to develop a new town in the northeast New Territories. Under QVB, each person has the right to buy as many votes as he wants at a price equal to the square of the number of votes that he buys:
Number of Votes Price
1 $ 1
2 $ 4
3 $ 9
The outcome is determined by majority rule, based on this method of vote calculation. If Ann buys eight votes in favor of development, Bo buys four votes against, and Chou buys two votes against, then the program is approved by a vote of eight to six. By contrast, with ordinary voting the project would be rejected two to one. Voters vote and pay through a mobile app or website.
Their payments are then distributed – to each other, in equal shares. Ann paid $64, Bo paid $16, and Chou paid $4, for a total of $84, and now each person receives a third of that total, $28. Ann’s net loss is $36, but he beneﬁts from the new development, while Bo and Chou nets $12 and $24, respectively, compensating for their disappointment. The redistribution of the money reduces the impact of a loss, in contrast to a winner-take-all arrangement under “one person, one vote.”
Not everyone emerges better off. Bo is a little worse off because he received $4 less than he would have paid to block the development. But over time, as additional votes are held on other policies and projects, it is highly likely that everyone gains more than he loses. This is again in contrast with “one person, one vote” where a minority can be outvoted again and again.
Why does QVB work? It forces voters to pay for the impact of their votes on other people, in the same way that a waste charging scheme forces people to take into account the effects of waste disposal on others.
The voter chooses the number of votes that equalizes the marginal beneﬁt for him, in terms of inﬂuence on policy, and the marginal cost for those who vote the other way. People who are passionate for new development exert more inﬂuence than those who are mildly against it – but squaring the cost of voting ensures that they don’t go too far.
An objection to QVB is that people must pay to vote, and thus wealthy people will inﬂuence outcomes more than will poor people. This concern can be mitigated.
First, because the price of voting is the square of the number of votes cast, it will go up extremely quickly. If Mr. Li Ka Shing wants to spend $1 million to support the new development, he will be able to cast only 1,000 votes – a drop in the bucket relative to the number of voters in Hong Kong who would be willing to pay a dollar in order to be heard.
Second, keep in mind that the collected funds are returned to all voters. If Mr. Li spends $1 million to outvote opponents, he’s going to get little of his money back, while all the people who buy only a handful of votes will rake in his money. This will happen whether or not Mr. Li wins. And, for the poorest voters, the money will be a lot more valuable than whatever modest advantage they would obtain from opposing the new development.
Third, the QVB mechanism can be modiﬁed to weaken the inﬂuence of wealth. The government could cap the number of votes that people may cast. Under this system, the advantage of wealth would be minimal.
A “one person, one vote” mechanism was first designed when France became the first nation to adopt universal male suffrage in 1792. (The first unrestricted female suffrage in a major country was granted in New Zealand in 1893.) This was at a time when almost everyone was very poor, except for a very small group of elites. The diversity and intensity of preferences mattered little when three-quarters of a household’s spending was on food and almost everyone had little time to pursue their own interests other than to put food on the table.
This is no longer true today. The appearance of a host of what Moisés Naím calls “micro-powers,” everything from NGOs to lobbyists, is dis-intermediating traditional politics. Public policies and projects are held hostage to a primordial method for determining citizens’ preferences that fails to resolve modern-day conflicts in rich societies. The growing prevalence of diverse minorities with intense interest in narrow issues, and a largely disinterested public on most of these issues require an updated method for determining citizens’ preferences.
QVB is a forward-thinking method. It is the first general approach to democratic decision-making that targets the core voting method rather than tampering with regulatory constraints to mitigate the negative consequences of “one person, one vote.” It is able to reflect variations in preferences and intensities among voters.
This method is especially useful for resolving highly controversial decisions: developing the Northeast New Territories, redeveloping part of the country park, finding landfills, preserving heritage structures, siting columbaria, banning life chicken imports, and numerous other issues.
Eric A Posner and E Glen Weyl, “Voting Squared: Quadratic Voting in Democratic Politics,” Coase-Sandor Institute for Law and Economics, Working Paper No. 657 (2D Series), University of Chicago, February 2014.
Building Blocks for a Narrative on Hong Kong’s Democratic Political Development (Part X)