Consider the structure of the British government as shown on Yes Prime Minister1. We have two competing power centres (the ministers and the civil service), each with their own incentives. The civil servants wants to increase the power of the service, prevent government policy from changing, and get knighthoods. The ministers want to increase their poll numbers, get reelected or promoted, and, occasionally, implement the policies from their manifesto.
Weirdly enough, this works surprisingly well in practice. In a given episode we’ll usually have a plan proposed by one or both sides, with all sorts of shenanigans as the other side tries to block or manipulate it. The whole process is a giant mess of internal politics and manipulation done by people who aren’t particularly noble and patriotic. But if we look at what they actually do by the end of the episode, they end up settling on the good policies for the country more often than not (and when they don’t, it’s often because they choose short-term benefits over long-term ones).
There’s a couple of reasons for this to work. First, both the ministers and the civil service want to look like (and, to some degree, actually are) interested in advancing British interests. So in a conflict between them, the side that’s actually advocating for British interests has an inherent advantage and is more likely to win out.
Second, both sides are sort-of aligned with British interests. Their interests aren’t exactly the same, but they are both positively correlated. And while the components of each side’s interests that are aligned with British interests add up, the components that aren’t are random and are just as likely to cancel out. For example, the minister wants change for change’s sake (to look dynamic), and the civil servants want to avoid change (they hate all change), so the biases on change vs the status quo mostly cancel out.
This is analogous to the classic problem of guessing how many jelly beans there are in a jar.
The best strategy for this problem is to let everyone else guess first, then take the average of their guesses. This works because each person’s method has a component that’s based on the real information they got from the jar, and a random noise component, so the distribution of guesses is a normal distribution centered around the true number of beans.
And so, we end up with a system of government that’s pretty well (but not perfectly) aligned with actual British interests.2 It has its flaws, but as a system of government it works better than either the civil service of the ministers would by themselves3.
This is from a (possibly realistic) TV show, but the dynamic of splitting power between differently-incentivised institutions into a system with somewhat-better incentives has some real examples beyond the British government where it works (and some where it doesn’t):
- The social democratic model of a free market + a government that gives regulations and a safety net. In this case we have the free market, whose incentives are to maximize profit locally for each individual person, and the welfare state, which is mostly incentivised to do things that sound good to the median voter. Neither of these is exactly aligned with the goal of maximizing social welfare, but between them they end up working reasonably well.
- Unions and competition: We have two methods for protecting workers’ interests in companies. The simpler one is competition – workers that aren’t paid or treated well enough can leave and go work somewhere else, which gives companies the incentive to pay workers what they’re worth. This has some failure modes – for example, companies with monopolies can be difficult to leave for a competitor, and this gives companies no incentive to give employees job security or severance pay.The alternate method is unions. They do pretty well with things like job security, but have their own failures. Union organizers have their own politics and can have conflicts with their own members, or just be corrupt. Strong unions can also have devastating effects for the companies that employ them, or even society at large.
Whether unions make the system better or worse overall is a bit unclear. They seem to work well in Scandinavian countries and may work well in some sectors in America, but they’ve also had some truly catastrophic failures. The problem here seems to be that they override instead of challenge their competing systems, so there’s nothing to cancel out their flaws.
- Power centres in running a city: To list just a few power centres in New York: The rich people who run the finance wold, the UMC people who between them own most of the money and property, the social activists, the people who grew up in the city and have all the connections, the city council, the mayor, the
unaccountable military dictatorshipNYPD, and the state governor. The net effect is a mixed bag – the actual running of the city is a vetocratic nightmare of incompetence, but the city mostly functions impressively well despite that. Some of that is because of legacy systems that still mostly run well (like the subway), but a lot of that is just because the city has so many different things going on that even some of them working is enough to make up for a lot of the things that don’t.
Going through the examples, there’s a few things we see that make multiple systems work better: The first example works pretty well because the systems are mostly independent – and it generally works better the more independent the systems are (that is, when the government provides its own competing services rather than mostly acting through regulating business).
Another failure mode is when the competing systems are hierarchical – when one system effectively has the power to override other systems, we lose independence. We end up getting most of the flaws of the overriding systems, and maybe a few of the flaws of the other one – but the secondary systems can’t really correct the flaws of the overriding system, so it only goes one way.
Another way to lose independence is hostility – if one or more power centres see themselves as being in a zero-sum competition with the others, they can end up spending most of their effort trying to work against the others’ goals instead of towards their own. This ends up being the exact opposite of what we want – every system works in the opposite direction to someone’s interests, so we end up making progress in the exact direction that makes everyone worse off.
Examples of this are negative political partisanship (this is one of several reasons high partisanship is really bad), and the housing crisis – once NIMBYs started to see blocking construction that could benefit other interest groups (young people and newcomers) as an end-goal in itself, we had at least one power system that was motivated by the inverse of someone else’s goals instead of their own positive goals, and the total system inevitably ended up going out of alignment.
Finally, we have the NYC government’s vetocracy – when you have a million different systems, each of which can block others from doing things (but not help them do new things), then even if the net system is well-aligned (which in New York it mostly is), you end up with so much friction that it’s just too hard to get anything done.
2. The thing it’s aligned with isn’t exactly British interests – it’s British interests with a Bias towards short-term satisfaction. (A good example is the episode where they avoid appointing a competent head of the Bank of England, because in the short term he’d uncover a major corruption scandal which would create a run on the pound). This happens because both the Civil Service and the Ministers have a bias towards avoiding short-term upheavals over long term benefit, so these biases don’t cancel out. We could add a third segment of government with a long-term focus – in theory, this is what the Crown or the House of Lords are for – but these institutions also create a whole bunch of noise and in practice we’ve mostly decided to disempower them.↩
3. Jury’s still open on how it compares to strange women lying in ponds distributing swords.↩