By some help from professor Robert Östling at SSE, I got to know about a policy suggestion closely related to my Policy Dollar suggestion. I am not sure if the idea originated with them, but the most famous proponents for this idea are Eric Posner and Glen Weyl, whom have written the book Radical Markets. (Check out Weyl’s website for more info and other ideas: http://glenweyl.com/research/)
They argue for Quadratic Voting, QV, as a way to solve the problem of majority rule in classic one-person-one-vote, 1p1v, democracy. The problem with 1p1v is that intensity of preferences does not matter, only the direction of preference matters, and thus the majority always wins. Even if there are minorities that have very intense preferences that do not align with the majority. In such a case, much well-being is lost when the minority loses. To solve this, Posner and Weyl argue that we should introduce QV, where each citizen can expend voting credits to buy votes. The cost of these votes increases quadratically, hence the name Quadratic Voting.
This system would allow citizens to express their preferences in a more dynamic way. Instead of only expressing three different preferences, yes, no, and indifferent, voters in QV can express intensity of their preferences by expending more votes either for or against the proposal. This would allow for a maximization of the entire groups well-being instead of the well-being of one subset of the group at the expense of that of another. For this to be true though, every voter must vote proportionally to how much she cares about the issue. In the QV framework this is solved by the marginal cost of casting the next vote. The marginal cost increases proportionally with the number of votes. All else equal, if I value being able to change the outcome of a vote twice as much as you, then I will spend twice as much as you at the margin.
This relates very well to my Policy Dollar suggestion, I mentioned in my first post about it that one of the potential benefits of Policy Dollars is that it can help politicians to vote more in line with their preference. I had not thought very much about the particular dynamics of the voting, implementing QV with Policy Dollars seems sensible in that it would make politicians vote proportionally to their intensity of preference.
Posner and Weyl also propose that QV should be implemented on a nationwide level. Something which I never thought of, in part because I was solving the problem of lies and deception not the problem of preference intensity, but nevertheless it is an interesting idea. The authors estimate that the economic benefits of switching from a 1p1v-system to QV would be large, they even propose that it could be as large as 20% of national income. I am not too sure about the economic benefits, even though I think that QV would make handling public goods more efficient which in itself could bring massive value. The societal and cultural benefits could also be large, especially in the fact that the divide between politics and the public may be bridged as it would be easier for politicians to see what the public cares about and vice versa.
There have been applications of QV in settings that are more like the one I first envisioned, Riksdagen in Sweden. Where smaller numbers of people get to vote on issues by using QV. This seems to imply that QV could work in the Riksdag, although there are some issues to be resolved before that could become reality. Since income should not be a factor in voting, each politician should get an equal number of credits that can be used to buy votes. The baseline for the credits might need to be the 1p1v-system, which would mean that each politician would get enough credits to be able to cast one vote in each referendum over the year. (If there are 400 votes per year in Riksdagen, then each politician would get 400 credits to buy votes for.) If one would like to make politicians able to more clearly express their preferences, then on could adjust the volume of credits. If the credits are multiplied by four, then each politician can cast two votes per vote if she intends to vote in all votes.
As is clearly implied in the above paragraph, there are many questions that are still to be answered if Policy Dollars/QV should ever become reality. I still think these suggestions are worth thinking about, as they may bring immense societal value if implemented in the right way. It is safe to say that at least I will continue to explore these suggestions.