Working Paper: NBER ID: w20417
Authors: Laurent Bouton; Aniol Llorente-Saguer; Frédéric Malherbe
Abstract: A group of agents wants to reform the status quo if and only if this is Pareto improving. Agents have private information and may have common or private objectives, which creates a tension between information aggregation and minority protection. We analyze a simple voting system - majority rule with veto power (Veto) - that essentially resolves this tension, for it combines the advantageous properties of both majority and unanimity rules. We argue that our results shed new light on the evolution of voting rules in the EU institutions and could help to inform debates about policy reforms in cases such as juries in the US.
Keywords: No keywords provided
JEL Codes: D70
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| majority rule with veto power (veto) (D72) | resolves the tension between minority protection and information aggregation (D72) |
| majority rule with veto power (veto) (D72) | protects minorities similarly to unanimity (J15) |
| majority rule with veto power (veto) (D72) | aggregates information at least as effectively as majority rule (D79) |
| veto (D72) | dominates both unanimity and majority rules in terms of implementing the Pareto criterion (D71) |
| no agent can be worse off under veto than under unanimity (D72) | some agents are strictly better off (L85) |
| adopting veto (D72) | Pareto improvement for voting bodies currently using unanimity (D72) |