Capitalism, Democracy, and Countermajoritarian Institutions

Barry Weingast ()

Supreme Court Economic Review, 2015, vol. 23, issue 1, 255 - 277

Abstract: Is democracy compatible with thriving markets that produce long-term prosperity? To survive, a thriving market-economy requires restrictions on political choice, including the rule of law, secure property rights and the enforcement of contracts. This problem comes to the fore as many democratic theorists advocate fewer constraints on the choices by political officials. Robert Dahl, perhaps the most prominent theorists of democracy, asks “How democratic is the U.S. Constitution?” His answer: not very because of its many sources of constraints on politics.Americans take political and constitutional stability for granted. Yet, only 25 percent of all countries have a government free of violent turnover for a generation and the number of countries that have sustained democracy since 1950 is around two dozen. This paper advances a framework for understanding democratic stability, including three conditions: the limit condition, which enhances democracy’s survival by lowering the stakes of politics and preventing coups; the consensus condition which supports citizen-coordination to defend against possible transgressions; and the adapta­tion con­dition, which holds that successful constitutions adapt the constitution to shocks and crises. Constitutions embody the limit condition through countermajoritarian con­straints. The force of this paper is to demonstrate the value of appropriately chosen countermajoritarian provisions in the constitution that constrain democracy. In particular, such constraints are necessary to support long-term, stable democracy as well as a thriving market economy.

Date: 2015
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