Alterative Governance and Decision Making / Metrics / Betting Approaches
Dante Monson
Yes, there are governance approaches and algorithms that may be more optimal than quadratic voting (QV) depending on the specific context and goals of the system. While QV is effective at aggregating the intensity of preferences, other models are better suited for addressing issues like accountability, externalities, and information aggregation.
1. Futarchy: Betting on Beliefs, Voting on Values
Futarchy is a radical governance model proposed by economist Robin Hanson that combines democracy with prediction markets.1 Its core principle is "Vote on values, bet on beliefs."2
How it Works:
Vote on Values: The community or electorate democratically votes on a well-defined, measurable objective or "welfare metric" they want to maximize.3 This could be anything from economic growth (GDP) to an index of well-being, happiness, or environmental health.4 This is the "what" of the decision.
Bet on Beliefs: Once the objective is set, a prediction market is used to decide "how" to achieve it.5 Competing policy proposals are put up for a vote, but instead of people casting votes, they place bets on which policy will lead to a better outcome based on the predetermined welfare metric.6 For example, a market would be created for the proposition "If policy A is implemented, the welfare metric will be X," and another for "If policy B is implemented, the welfare metric will be Y."7
The Decision: The policy with the highest predicted value in the market is automatically adopted. The market is then resolved based on the actual outcome, and those who bet correctly are financially rewarded.
Why it's More Optimal:
Solves Information Aggregation: Traditional voting, including QV, can be flawed by voter ignorance. Futarchy incentivizes those with the best information to participate by giving them a financial stake in the outcome.8 It "puts their money where their mouth is," making it a powerful tool for leveraging collective intelligence.
Direct Accountability: It creates direct, financial accountability for those who influence a decision. If a policy they supported fails to deliver on its promise, they lose money.9 This stands in stark contrast to traditional voting where the voter bears no direct consequences for a poor choice.
2. Decision-Based Approaches for Accountability
Moving beyond specific voting algorithms, a different approach focuses on building systems that hold decision-makers accountable for the consequences of their actions, particularly for negative externalities and dependencies.
Pigouvian Taxes and Externalities: Inspired by economist Arthur Pigou, this approach involves a social cost function that assigns a monetary value to the externalities of a decision.10
Mechanism: When a voter or a delegate makes a decision, the system calculates the predicted social costs (e.g., pollution, increased traffic, loss of public land) and levies a corresponding "tax" or "fee" on the decision-maker or the group that benefited from the decision. This forces them to internalize the costs that would otherwise be borne by the public.
Accountability: By tying the cost of a decision to its real-world impact, this approach creates a powerful form of accountability. It transforms a collective problem into an individual or group problem, incentivizing better decision-making.11
Reputational Scoring and Social Credit: This model uses algorithms to track and score the past decisions of voters and delegates.
Mechanism: Each voter or delegate has a reputational score that increases when their past votes lead to positive outcomes and decreases when they lead to negative externalities or failed objectives. This score can then be used to grant them more voting power in the future or to influence others to delegate their votes to them.
Example: Liquid Democracy: In a liquid democracy, voters can delegate their votes to a trusted delegate.12 If a delegate makes poor decisions, the delegators can instantly revoke their vote and give it to someone else. The reputational score acts as a public record of a delegate's performance, making it easy for voters to choose a delegate who has a track record of good decisions and who is thus, accountable.
Agent-Based Modeling and Simulation: Before a vote is cast, a detailed simulation could be run to model the potential consequences of a policy, including all its externalities and dependencies.
Mechanism: Using data from previous similar decisions, a complex simulation can predict a decision's likely social and economic outcomes. Voters would be presented with a forecast of the consequences of each choice, including the potential for negative externalities.
Accountability: While this doesn't directly punish a poor choice, it increases the informational accountability of the voting process. Voters are forced to confront the potential consequences of their decisions before they make them, reducing the "ignorance" factor and potentially leading to a more informed choice. After the decision is made and the results are in, the actual outcome can be compared to the simulation's forecast, providing a clear report card on the collective wisdom of the voters.
You're asking to "explore more" on the topic of governance and voting, specifically looking for alternatives to quadratic voting that emphasize accountability for externalities. Here are some more detailed approaches and algorithms.
1. Liquid Democracy (Delegative Democracy)1
Liquid democracy is a hybrid of direct and representative democracy. It aims to combine the direct participation of direct democracy with the efficiency of representative democracy.
How it Works: In a liquid democracy, every voter has the choice to either vote on an issue directly or delegate their vote to a trusted individual, who then votes on their behalf.2 This delegation is not permanent; it can be changed for each issue.
Accountability:
Delegation as a Feedback Loop: The core of accountability in liquid democracy is the ability to withdraw delegation. If a delegate votes in a way their constituents disagree with, they can lose their delegated votes. This creates a strong incentive for delegates to be transparent and to vote in line with the interests of their constituents.
Reputational Scoring: This model naturally lends itself to a public, reputation-based system. A delegate's track record is public and can be easily audited. This reputation acts as a form of social capital, and those who make decisions that lead to negative externalities or are out of step with their constituents' wishes will see their reputation and delegated voting power diminish over time. This system makes decision-makers accountable not just for their vote, but for the trust they've been given by others.
2. Method of Equal Shares
This is an approach for participatory budgeting, a form of collective decision-making, which can be more optimal in certain contexts.
How it Works: Instead of everyone having a single vote or a budget of votes, each voter is allocated an "equal share" of a total budget.3 They can then distribute this share among different projects or proposals. For example, if a community has a budget of $100,000 for public works, and there are 1,000 people, each person effectively controls a $100 share of the budget. They can then allocate their $100 to the projects they prefer.
Accountability for Externalities:
Incentivizes Diverse Projects: Since each person has an equal, fixed share, there's no incentive for "tyranny of the majority" or for a single large group to fund only a few massive projects. Small, niche projects that are important to a minority can still get funding, as long as a sufficient number of people are willing to allocate a portion of their share to it. This directly counters the externality of "all-or-nothing" decision-making, where a majority project gets all the funds and a minority project gets nothing.
Reduces "Wasteful" Proposals: The system inherently ties the popularity of a project to its funding, not just its approval. If a project is incredibly popular but also very expensive, it may not get all the money it needs. This makes project proposers more accountable for the efficiency and cost-effectiveness of their proposals.
3. Combining Approaches for Enhanced Accountability
The most robust systems will likely combine elements from different models.
Futarchy with Externalities Pricing: Imagine a Futarchy system where the prediction market not only bets on a "welfare metric" but also includes the cost of predicted externalities. For example, a policy's success is measured by both GDP growth and the cost of pollution it's expected to generate. The market would then bet on the net benefit (GDP growth - pollution cost), making the decision-makers directly accountable for the full range of consequences, not just the intended ones.
Liquid Democracy with Pigouvian Taxes: In a liquid democracy, when a delegate's vote leads to a decision with negative externalities (e.g., a policy that increases traffic), the system could automatically apply a "tax" on their reputational score or even on the delegators who supported them. This would make both the decision-maker and their supporters bear a consequence for the negative outcome, incentivizing them to be more cautious and informed. This provides a direct, algorithmic method of holding voters and delegates accountable for the externalities of their collective choices.
Prediction Markets for Accountability: Prediction markets can also be used as a post-facto tool for accountability. For example, after a policy is implemented, a new prediction market could be created to bet on whether the policy will meet its stated goals. The results of this market could then be used to inform public opinion, affect a delegate's reputational score, or even trigger a formal review of the decision. This creates a continuous feedback loop that reinforces accountability.