Game Theory and Politics
One particularly distinctive attribute of representative democracies which makes them interesting to study for social scientists is that the outcomes of democratic processes are necessarily uncertain. In most democratic contexts around the globe, a wide assortment of political forces compete against one another within a specific institutional framework to advance their interests. Political forces tend to take part in this contest strategically. This means that they are willing to take into account each other’s likely reactions before deciding on a course of action.
In representative democracies, such strategic competition usually takes the form of negotiations among political elites rather than through a universal deliberative process. No one group can accurately predict the outcome of these negotiations because such knowledge is inescapably local in a system of decentralized strategic action. Therefore, the balance of power often can shift unpredictably between political actors from election to election in a democratic context.
In fact, the major differentiator between established representative democracies and repressive authoritarian regimes is that in established democracies, every political group must be willing to subject its interests to institutionalizing uncertainty. However, in an authoritarian regime, members of the regime are immune from the need to subject their interests to competition due to their ability to maintain political hegemony through the brutal oppression of the citizenry and civil society.
The key question raised by the above structural description of the working of established democratic systems is as follows: under what conditions political forces can be convinced to participate in democratic institutions rather than attempt to subvert them through authoritarian measures? In his seminal text, “Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America”, Przeworks claims that there are five potential outcomes of the conflict between political forces that are conceivable, given their goals and resources. First, the structure of conflicts could be such that no democratic institutions can last, and a new dictatorship is eventually established, such as was the case in Iran.
Second, democracy could be agreed to as a transitional solution if it is clear that democratic institutions will not last such as was the case in Argentina between 1953 and 1976. Third, democratic institutions could be durable if adopted but a dictatorship is established anyways, which may ensue when there exist strong disagreements over the particular institutional framework which should be adopted. Fourth, conflicting political forces could agree to an institutional framework that will not last even through some democratic institutions could be durable if adopted, as occurred in the Polish case.
The fifth and final potential outcome posited by Przeworksi’s seminal text is the main subject of this paper. He posits that if institutions can be designed in order to “offer to the relevant political forces a prospect of eventually advancing their interests that is sufficient to incent them to comply with immediately unfavorable outcomes”, then it possible for democracies to consolidate themselves spontaneously (19). This claim is grounded in the discipline of game theory and four additional assumptions.
According to Christine Chwaszcza in her chapter entitled “Game Theory” in the book “Approaches and Methodologies in the Social Sciences: A Pluralist Perspective”, game theory is a branch of Bayesian rational choice theory which can be applied to explain the behavior of individuals by their motives and reasoning and as an abstract model for the analysis of social structure within the paradigm of methodological individualism (Chwaszcza 139).
Since rational choice theory claims that rational actors will always choose the course of action that maximizes their own expected utility, it is only applicable in a set of circumstances where actors are able to cardinally rank their preferences. Given the fact that actors are distinguished from one another by their unique preference ranking, game theory seeks to discover equilibrium points. These are outcomes which are stable, meaning that they will be preferred even if all of the relevant actors know in advance how other participants in the game will act.
In the discipline of game theory, a game is defined by the order in which the relevant actors make their decisions and the payoffs which result from all of the logically possible combinations of the actor’s choices. However, in contexts where the rules of the game are not fixed by an outside authority, the relevant actors are incentivized to manipulate the rules of the game in order to produce outcomes which are more to their advantage. Devices which successfully manipulate a game in this manner are known as “strategic moves”.
According to Avinash Dixit and Susan Skeath in their book “Games of Strategy”, strategic moves in a game can take one of three forms- commitments, threats, and promises (Dixit & Skeath 311). Commitments allow actors to seize the first move advantage by visibly announcing their intentions to the other players before the first move of the game in an irreversible manner. Threats and promises are response rules wherein players announce that their future actions are conditioned upon what other players do in the interim. Response rules which lead to bad outcomes for other players if they act contrary to one’s intentions are threats; those which lead to good outcomes for other players are promises.
By signalling their intentions, players hope to change the payoffs other players can expect to achieve. However, in order to be effective, strategic moves must be credible, meaning that other parties in the game must believe that the actor making a strategic move will follow through on their commitment, threat, or promise. Absent such a guarantee of action, other players will stick to their original preferences. Therefore, the nature of strategic moves is that one must be reluctant to carry them out because there is a cost associated with them. Only when others believe that one is not willing to incur the cost otherwise will their behavior be modified.
In addition to the assumptions made by the discipline of game theory, Przeworksi’s argument requires one make four further assumptions. First, one must admit that institutions serve a dual role as both the rules of the competition and as codes of punishment for noncompliance because they tend to replace actual coercion with predictable threats. Second, one must recognize that there exist many ways to organize a democracy.
Third, one must assume that institutions make a difference in how resources are distributed throughout society, which means that under particular political and economic conditions, some institutional frameworks will consolidate themselves and others will not be able to. And fourth, one must assume that actors discount the future, meaning that they attach less value to rewards in the far future than they do to rewards now.
With these assumptions firmly in place, one can begin to understand why it is possible that the strategic interaction between an authoritarian regime and its civil society can lead to democracy. If actors believe that the long-term, cumulative value of compliance outweighs the gains they could expect through subversion of the system, then they will comply even with unfavorable outcomes. Of course, different actors (such as the military, bourgeoisie, and unions) require a different minimum probability that they will do well under a particular system of institutions in order to comply.
However, one must still account for the fact that self-enforcing democracies are not the only possible outcome of the strategic situation that arises when dictatorships collapse. In human history, it is very rare to find instances when an authoritarian regime has crumbled absent the efforts of liberalizing elements within the regime itself.
According to O’Donnell (1979:8), liberalization consists of measures which, although entailing a significant opening of the previous bureaucratic authoritarian regime (such as effective judicial guarantees of some individual rights or introduction of parliamentary forms not based on free electoral competition), remain short of what could be called political democracy.
In countries around the globe, transitions to democracy were preceded by a moment when a group inside the authoritarian power establishment decided to tolerate an autonomous organization in the civil society. However, one of the common features of dictatorships is that, under normal circumstances, they cannot and do not tolerate such independent organizations because regimes fear the possibility of the emergence of collective projects for an alternative future which threaten their political hegemony over their citizens. How then does one explain this apparent paradox?
Przeworksi claims that part of the answer is that often, divisions within the regime mean that most liberal elements within the regime see within the burgeoning of a limited civil society the possibility of an alliance that could change the relations of forces within the power bloc to their advantage. The parts of the regime which hold this view, hereafter referred to as “Liberalizers”, hope to incorporate the new groups which invariable result from the temporary relaxation of repression into authoritarian institutions, thereby broadening the social base of the regime while releasing social tension in a manageable way. Therefore, they are willing to make a break with the most repressive segments of the regime, hereafter referred to as “Hardliners”.
According to Adam Przeworksi, this process of limited liberalization is inherently unstable because as civil society becomes comfortable with the idea of mobilization without repression, they are more likely to also become comfortable voicing goals, interests, and projects which are independent of the regime. However, given the fact that Liberalizers are only interested in incorporating those groups which accept their direction and control into the official structure of the regime, newly organized groups find that they must struggle in the streets for their values and interests. Such mass demonstrations begin to undermine Liberalizers’ position within the regime as Hardliners react to the violation of the most sacrosanct of authoritarian values, order.
At this point in the proceedings, Liberalizers within the regime are faced with a difficult choice. They can either support the burgeoning civil society in their attempts to extricate the polity from the clutches of authoritarianism, turning into Reformers, or they can throw their support behind the Hardliners and attempt to repress their way back into control of how things stand in the regime. In either circumstance, Liberalizers’ position in society is significantly reduced.
So with what means can one begin to explain how it is that transitions to democracy can occur if Liberalizers only desire a partial opening of the regime at the beginning of the process? Przeworksi posits two explanations which both rely on preferences being fixed and one political group making mistaken assumptions about the preferences of other actors in the polity. In his first explanation, Przeworksi claims that it is possible that Liberalizers within the regime are in fact proto-democratizers. If this were true, it would mean that they would prefer a transition towards a democratic order over a reinstatement of the status quo dictatorship, a narrower dictatorship, or an insurrection due to the repression of civil society.
These proto-democratizers know that Hardliners in the regime would never accede to liberalization if they knew the Liberalizer’s true goal because Hardliners by their very nature would always prefer a narrower dictatorship to a more broadened one. Therefore, the Liberalizers deliberately mislead Hardliners into believing that they prefer any outcome other a transition while sending correct signals to civil society that they will support them in their efforts to transition. In this scenario, Hardliners agree when Liberalizers propose to open up the regime to some autonomous organization because they believe that this will result in a narrower democracy because Liberalizers will join them in repressing any attempts to organize outside the regime.
In his second explanation, Przeworksi claims that it is possible for Liberalizers to lose control of the limited opening they seek if they mistakenly have a much higher estimate of the possibility of successfully repressing civil society than society does. If this is the case, then as Liberalizers are forced to update their estimate as they watch protests spill onto the streets, they would eventually come to view a transition as being more desirable than an insurrection which would devastate their position within the regime. In this scenario, Liberalizers would fear the reprisals they would faced from Hardliners if the project of liberalization which they championed were to require Hardliners to extinguish.
Przeworksi also posits sociological and psychological explanations for Liberalizer’s behavior. Sociologically, it could be the case that as civil society organizes, Liberalizers, through their interactions with the opposition, come to not see the prospect of a civil society as threatening as they used to. Negotiations show that it is possible for the opposition to make concessions and personal contacts encourage rapprochement between individuals with different political beliefs. Therefore, it is possible that Liberalizers would change their beliefs endogenously as a result of bargaining with the opposition.
Psychologically, it could be the case that Liberalizers are not perfectly rational, meaning that they allow their desires to affect their beliefs and actively succumb to the confirmation bias. If foreign pressure, mass mobilizations, and economic conditions make the prospect of liberalization seem inevitable, then irrational Liberalizers might be able to persuade themselves, in spite of all the evidence that points otherwise, that a limited opening will be successful. They might even delude themselves into believing that they could win competitive elections under a democracy, thereby securing their political position without resorting to repression.
Liberalization is just one step on the path of transition towards consolidated democracy. Polities must still be able to extricate themselves from the authoritarian regime in contexts where the military remains strongly in support of the regime in order to constitute consolidated democracies. However, actors face a paradox- the anti-authoritarian forces must unite to bring about democracy knowing that they will be competing against one another under the new system. Therefore, four political actors must be distinguished in this situation- Hardliners and Reformers (who may have been Liberalizers in the previous stage of the game) within the authoritarian bloc and Moderates and Radicals within the opposition. Hardliners tend to be drawn from the most repressive cores of the regime, such as the authoritarian bureaucracy and the police force while Reformers are culled from the ranks of politicians and groups outside the state apparatus such as capitalist sectors of the bourgeoisie. Moderates and Radicals in the opposition are distinguished by their level of risk aversion- Moderates fear Hardliners more than Radicals do.
If Reformers ally with Hardliners and Moderates with Radicals, the two sides will not be able to reach an agreement and violence will ensure. However, if Reformers ally with Moderates and Moderates ally with Reformers, Przeworksi claims that a democracy with guarantees can be negotiated if three conditions are met. First, Reformers and Moderates must agree to establish institutions which allow for a significant representation of the political forces they both represent. Second, Reformers must be able to restrain or neutralize Hardliners. And third, Moderates must be able to control Radicals. This is because the defining feature of the extrication context is that Reformers cannot be certain of electoral success in the new democratic political order and so therefore must be given guarantees by Moderates in order for them to be willing to ally with them rather than with Hardliners. Absent such guarantees, Reformers would be literally and metaphorically slaughtered at the polls because of their association with the former regime. However, Radicals are loathe to provide such guarantees since they are relatively less afraid of the regime, and must be convinced to do so by Moderates. Therefore, extrication can only occur if during the process of transition Radicals become less extreme in their anti-authoritarian views and become open to the possibility of competing in a democratic context.
Absent the presence of a military force committed to defending the regime, liberalization can proceed straight to the constitution of democratic institutions. Here, Przeworksi claims that there are three possible scenarios. In the first scenario, the relation of political forces is known and uneven. This leads to the creation of institutions which are necessarily tailor-made to fit the current political context. However, it is unlikely that these institutions will survive a shift in the balance of power. In the second scenario, the relation of forces is known and balanced. This situation is the most volatile in Przeworksi’s opinion, and could lead to a civil war. Therefore, the actors may be willing to enter into some kind of democratic framework simply to forestall the possibility of the situation devolving into a violent conflict that woudl be extremely costly for all involved.
In the third and final scenario, the relation of forces is unknown. Political actors can only craft institutions from behind a “veil of ignorance”, leading them to prefer institutions with strong checks and balances, which maximize the political influence of minorities since they can reasonably expect to be in the minority in the new political order. This kind of institutional framework will tend to counteract runaway increases in the political power of one group while at the same time providing insurance to losers of elections which lowers the stakes of each strategic competition.
To conclude, Przeworksi claims that transitions to consolidated democracies are the product of strategic interactions between regime and civil society because these interactions determine the kinds of institutions which will be adopted. If all parties are perfectly informed about the relative strength of political factions within the polity during the period of transition, then institutions will reflect those pre-existing imbalances.
However, when there is room for doubt, misdirection, and uncertainty about the balance of forces which will exist in the newly created democracy, then it will be in the mutual self-interest of all relevant political actors to support the establishment of institutions which have the possibility of persisting beyond the current context.
These institutions will offer the relevant political forces the prospect of eventually being able to advance their interests in the long run, which gets them to comply with unfavorable outcomes in the short term rather than attempt to subvert the newly democratic order and return to repressive authoritarianism.