Chapter 15. The Dilemmas of Institutional Reform

Study

The Constitution offers a clear roadmap for changing the laws and institutions by which we all live. However, creating multiple barriers to change—separate levels of government and, at the national level, separate branches—ensures that radical deviations from the status quo are rarely made. When such changes are implemented, they are likely to be especially durable.

Nonetheless, American history offers many examples where reformers beat the odds and changed the status quo. Many of these reforms, including women's suffrage, were tried first in individual states and later exported to the national level. Ironically, the individuals and groups at the heart of these reform movements were motivated more by a sense of moral purpose than they were by the monetary or other "instrumental" benefits of achieving their goals.

Reform of American laws and institutions becomes necessary when the incentives of those who make critical decisions fall out of alignment with the collective good. American politics is rife with collective action problems like the prisoner's dilemma. Unfortunately, those who benefit from a status quo policy have both motive and opportunity to thwart change. Even when successful, reforms can have unintended consequences. This chapter suggests several principles of institutional design that have helped move the American system toward a more perfect union.

Objectives

After reading this chapter, you should understand...

• Understanding how solutions to collective action problems can generate unintended consequences.
• Understanding why many reforms are launched in the states, not at the federal level.
• Recognizing the obstacles to organizing a successful reform movement.
• Knowing what impact electoral pressures have in opening up routes to reform.
• Realizing how institutions help political parties solve the coordination problems of choosing a single candidate for a particular office.
• Knowing how term limits solve the prisoner's dilemma among voters seeking greater turnover among elected officials.
• Recognizing the tragedy of the commons problem involved in writing a federal budget.
• Realizing how the amendment process for the Constitution reinforces the status quo bias in American politics.
• Understanding why efforts to improve voter turnout in the United States have not been pursued with greater energy.
• Understanding how institutional design can create incentives for individuals and thereby promote the collective good.

Review Questions

1. What are some basic principles of institutional design that have been used by the Framers and others to ensure that the interests of those who make political decisions are aligned with those affected by them?
   



2. What are the benefits of making the Constitution difficult to change? What are the disadvantages? Do these rules enhance or inhibit democracy?
   



3. What collective action problems do political parties and voters face in elections where multiple candidates from each party are running? How are these problems addressed by the implementation of direct primaries? Are there any disadvantages to primaries?
   



4. Why do many reforms, such as campaign finance laws, fail to work as intended?
   



5. Is there a particular institution, law, or policy in American politics that currently is in desperate need of reform? What solutions or reforms would you propose to deal with this problem? Is your solution realistic politically?
   



6. What role can individuals play in efforts to reform American laws and institutions? What are the benefits of engaging in political activity—be it voting, donating to, or working for a candidate or party? Do such activities ever pay off?
   



7. What are some potential unintended consequences of giving the president a line—item veto? Can you think of another example of the tragedy of commons?
   



8. Since Americans generally believe that the United States is the most successful democracy in history, why are there so many movements to reform it?
   



9. How does the power given to states in the U.S. federal system allow them to experiment with reforms, and how likely is it that successful innovations will spread to the national government?
   



10. Can citizens trust elected officials—who by definition have been winners at the game of politics—to set its rules in a way that will be fair to all players?