Presentation Notes (Bilingual)

1. Adam Przeworski:
Democracy and the
market
19 Oct 2015
Asta Waikwan TSOI D44005037

2. Brief Concepts(cont’d)
Prologue: Fall of Communism
Chapter 1: Theory of durable democratic institutions
Chapter 2: Choice of institutions during the transition to
democracy
Chapter 3: Capitalism or socialism ? Which one
generate growth with a humane distribution of welfare?
Chapter 4: Political dynamics of economic reforms

3. Questions from Prologue
• What kinds of democratic institutions are most likely to last?
• What kinds of economic systems — forms of property,
allocation mechanism, and development strategies — are
most likely to generate growth with a humane distribution of
welfare?
• What are the political conditions for the successful functioning
of economic systems, for growth with material security for all?
• What are the economic conditions for democracy to be
consolidated, allowing groups to organize and pursue their
interests and values without fear and under rules?

4. Democracy

5. •
(Pizzorno,1978)
•
(Luxemburg,1970:202)
•

6. •
•
*
•
•

7. Democracy is a system of processing conflicts
in which outcomes depend on what participants
do but no single force controls what occurs.(12)
It’s a system of ruled open-endedness, or
organized uncertainty.(13)
*Actors know what is possible, since the
possible outcomes are entailed by the
institutional framework; they know what is
likely to happen, because the probability of
particular outcomes is determined jointly by
the institutional framework and the resources
that the different political forces bring to the
competition.(13)

8. •
•
•
(compliance)

9. ?
How are outcomes enforced
under democracy?
Keys : Democracy , Rationality, Compliance
*5mins game

10. Graph (21)
outcomes of
strategic
situations
(1) Spontaneous
self-
enforcing
outcomes
(2) Bargains, or
contracts (23)
(3) Norms (25)

11. 1 Existence:
(welfare maximum over a
political community: common good, general
interest, public interest, and the like(Existence)
2 Convergence:
3 Uniqueness:
(no benevolent dictator could know what is in
the general interest)

12. *5mins game

14. (Democracy as an equilibrium)
•

15. 1 institution matter
2 different ways of organizing democracies
3 effective institutions make a difference
through their profound distributional effects

16. Important to see what this hypothesis does not apply.
(1) it doesn’t mean that democracy must have a social
content if the institutions are to evoke compliance.(32)
(2) the assertion that democracy cannot last unless it
generates a satifactory economic performance is not an
inexorable objective law.(33)
Democractic institutions must be “fair”. (33)
(Static version)They must give all the relevant political
forces a chance to win from time to time in the
competition of interests and values. (33)
(Dynamic version) political institutions “must be
effective” they must make even losing under democracy
more attractive than a future under non-democractice
alternatives (33)

17. Institutional Design
•
•
• 1853 1950s-1990s
• 1789
• 1948

18. 1.
2.
3.
4.

19. “Indeed, I discovered, much to my surprise, that we do not
have sufficiently reliable empirical knowledge to answer
questions about institutional design.” (35)
1. “worth noting that electoral majorities have been rare in
the history of successful democracies;in the postwar period
only about one election in fifteen has resulted in a majority of
votes cast for one party.”(36)
2.”Successful democracies are those in which the institutions
make it difficult to fortify a temporary advantage. Unless the
increasing returns to power are institutionally mitigated,
losers must fight in the first time they lose, for waiting make it
less likely that they will ever succeed. “(36)
3. “governments must be able to govern, and this implies
that they must be able to prevent some demands from
reaching the public sphere and certainly that they cannot
tolerate all important groups having veto power over public
policy”(37)

20. Transition to Democracy

21. Q1
(self-
enforcing) (democratic pact)?

22. Q2
Q3
21

23. Why do outcomes appear
uncertain?

24. • Social choice theory :
•
• Lechner

25. theme
How dirty campaigns should be ?
Illustrate example is?
Credit : Focus Taiwan

27. • Aumann(1987)
aka
Przeworski
•
possibility

28. Conclusion

29. Democracy is a system of processing conflicts in which
outcomes depend on what participants do but no single
force controls what occurs. Outcomes of particular
conflicts are not known ex ante by any of the competing
political forces, because the consequences of their actions
depend on actions of others, and these cannot be
anticipated uniquely. (12)

30. Recommend Readings

31. How to Lie
with Statistics
by Darrell Huff
since 1954

32. Correlation does not
imply causation.
Chapter 8
Post Hoc Rides Again

33. Political
Economy of
Democratic
Transitions
by S.Haggard
& R.Kaufman
since 1995

34. Chapter 3
Surviving Crises,
Withdrawing in
Good Times
Chapter 4
Comparing
Authoritarian
Withdrawals

35. Challenge me…