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Small Is Beautiful. The Democratic Advantages of Smaller States

04/30/2015 12:28 pm ET | Updated Jun 30, 2015

Wolf von Laer, PhD Candidate in Political Economy at the King's College London

Public choice theory teaches us that the bigger the political entity, the less incentives the citizens have to participate actively and to be well informed within a democracy. Democracy and its advantages should be discussed while taking the size of the democracy in question into account.

During my last visit to Switzerland, I was astonished to learn about the election process of local judges and other public offices, where some local towns and villages elect them by assembling at the local town square and vote. This form of democracy is totally different from a democracy that consist of over 300 million people, as in the case of the United States of America. The citizens of Switzerland know the people who are in charge. They are able to give direct feedback to them in the form of conversations, citizens' advocacy groups, or in severe cases, social ostracism. These mechanisms are not available, or at least weakened, in the case of the USA, where one member of Congress represents 600,000 citizens (when the U.S. constitution was written the number of citizens represented by an elected official was 30,000). Debates about the merits and shortcomings of democracies would benefit if the size of the state in question would be taken into account.

Social science and statecraft are complicated and their insights opaque. There are no conditions that can be held constant to accurately test the effects of one policy and compare it to another. It had to be learned the hard way that one cannot simply take a given institutional framework that has worked in one context (for instance common law or the rule of law) and enforce it onto a different society and get the same results. Institutions are sticky and are hard to change. This mistake is encapsulated for me by a presentation by the former commander of the US forces in Afghanistan, General McChrystal. One slide of the presentation showed the blueprint for Afghanistan to become a functioning state. This desire for such large scale planning is a Pretence of Knowledge.

Institutions are the result of evolutionary forces and built upon complex foundations. One cannot just simply transfer a set of institutions from one society to the next and expect the same results. That the U.S. has moved private troops out of (and have left numerous private mercenaries in) Afghanistan does not lead to the conclusion that "nation-building" was successful.

However, one has not to despair. These real-world complexities can be addressed by small states through experimentation. Smaller political entities are more capable of accounting for diverse cultural conditions. Sensible people diverge in their beliefs what the best policies are. If we have smaller states different views as to what constitutes a good society can be implemented. People can vote not only at the ballot but also with their feet. Admittedly, it is always difficult to move but if there are more options available these costs are decreasing. Citizens' feedback in small states will be faster in revealing what they desire. With more experimentation and a multitude of states that offer different public services there is more choice and more opportunity for learning.

One retort to this line of argument is the potential human rights abuses possible under a variety of heterogeneous states. This is a valid argument. However, it fails to show why this problem would be mitigated by larger sized states. The potential for abuse is given in small states and in large states. If human rights abusers get to power in larger states then the potential damage done is larger than in smaller states. Smaller entities are more restrained in what they can do due to the better feedback mechanisms available to the citizens. There are also more options for citizens to opt-out of a given society in a world full of smaller states. This is not possible if one landmass is controlled completely by one state that only allows for one way of producing public policy.

A democracy, just like any kind of system, needs to be judged by its institutional framework and the incentives it generates. I consider Switzerland to be a more robust framework for political decision-making than the USA, due to the superior feedback mechanism and the higher level of accountability of people in public offices. Of course, size is not the only one component that play a role within the institutional web that makes-up society. Nevertheless, I maintain that the complexities of the world we live in might be better handled by smaller institutions than by larger ones, due to their responsiveness, their agility, and the increased potential for experimentation.

This question and others will be discussed at this year's St. Gallen Symposium (7-8 May 2015) on the topic of "Proudly Small" -- www.symposium.org/livestream. Wolf von Laer is member of the St. Gallen Symposium's global Leaders of Tomorrow Community.

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