The Limits of Institutional Design

Francis Fukuyama

Johns Hopkins School of Advanced International Studies

Presidential/PM v. Electoral Systems

Plurality PR

Presidential

Parliamentary Westminster

US, Philippines Latin America

Continental Europe

Participation v. speed of decision-making (Buchanan and Tullock)

Percentage of population required to make decision

Exp

ecte

d D

ecis

ion

Cos

ts

Types of veto gates

• Electoral system– PR/plurality, district size, thresholds, timing

• Party discipline– Open v. closed list PR, campaign finance

• Bicameralism

• Federalism and decentralization

• Independent Judiciaries

System Rankings

• Classic Westminster

• Parliamentary/PR with strong parties

• Premier-presidential

• Presidential with plurality voting

• Parliamentary with fragmented parties

• Presidential with fragmented parties

British Election Results, 2001

party pop vote % pop vote seats % seatsLabour 10,724,953 42.0 412 62.5Conservatives 8,355,193 32.7 166 25.2Lib Democrats 4,814,321 18.8 52 7.9other 1,662,542 6.5 29 4.4

total 25,557,009 100.0 659 100.0

Successful Institutional Reform

• Electoral systems– Chile 1988, Japan 1994, Italy 1994, New

Zealand 1996, Thailand 1997

• Federalism– Brazil, Fiscal Responsibility Law (2000)

Conclusions

• No such thing as an optimal political system• Institutions come in complex, interdependent

packages• Good institutions heavily dependent on local

context and traditions• Need to invest in local knowledge of institutions• Leadership matters• Formal institutions matter less than many think