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Government as an Incentive Problem

There is a tendency to liken modern parliamentary systems to the kind of one-man rule seen in most presidential regimes. The claim, made by Don Savoie and others, is that prime ministers are all-powerful. But it’s more accurate to see parliamentary systems as a kind of corporate government, with the PM as CEO and the party bigwigs as a not impuissant board. The CEO is fine as long as he seems to be able to lead the party into the next election, but if not he’ll find he’s not really in charge. As happened to Thatcher in 1990 and Jean Chrétien in 2004.

The PM’s incentives are only imperfectly aligned with those of the party and the nation. The party has better incentives, and that is why parliamentary government more closely resembles the idealized assembly described by Edmund Burke in his Address to the Electors of Bristol, an assembly “of one nation, with one interest, that of the whole; where, not local purposes, not local prejudices, ought to guide.”

In a presidential regime, whose incentives are most closely aligned to the nation as a whole? The president, of course, and with the authority of the only person elected by the people as a whole he is in a good position to stare down a speaker from someplace in Ohio you never heard of.

Unless the president is term limited. Then it’s just him and the historians.

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