The Worst Problem of Instability in a Democracy

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The way to avoid that inherent instability in a democracy could be to put up weird institutions, committees and subcommittees. Riker said, if we'll hang on, hang on. People who don't go back and listen, there are three alternatives and you just constantly are voting between two of them. And so it leads to a lot of instability. It is rock paper scissors.

Economist and political scientist Michael Munger of Duke University talks about industrial policy with EconTalk host Russ Roberts. Munger argues that in a democracy, the default outcome for industrial policy is crony capitalism--attempts to improve on that outcome either by appointing experts or eliminating cronyism are going to fail for political reasons. The conversation concludes with a discussion of the reliability of Munger's claim and what options are left for dissatisfied reformers.