In 1959, the political scientist Seymour Martin Lipset made a simple, powerful point: “the more well-to-do a nation, the greater its chances to sustain democracy.” Lipset argued that as countries develop economically, their societies also developed the strengths and skills to sustain liberal democratic governance.
But, Lipset’s seminal paper focused exclusively on the income/assets of the citizens – which we find to be a tragic mistake. Indeed, he suggested that if the median income of a country’s citizen was less than $3,000 than it would be difficult or impossible to sustain democracy in that country – a dour and bleak view indeed.
Introducing the Representative Ratio
We find that by tweaking Lipset’s work and incorporating wealth data not just about the citizens but also the country’s legislators, we get both a more reliable metric of the health of a democracy and a significantly less pessimistic vision. Indeed, we believe that there are scenarios where even the poorest of countries would be able to sustain thriving and powerful democratic institutions while also combatting corruption.
As such, we propose a new metric called the Representative Ratio (RR). Where RR is defined simply as the ratio between the median wealth of a country’s legislators (in the numerator) and the median wealth of the country’s citizens (in the denominator). This means that the United States has an RR of 40 because the members of Congress have a median net worth of 1 million dollars, and the net worth of the median citizen is 50,000 dollars. So 1 million divided by 50,000 yields an RR of 40.
RR In the Field
How and why money should be so powerful in a democracy where each person has a vote – and most voters, by definition, are not in the 1 percent – has remained a mystery. – Stiglitz 2012 – The Price of Inequality
So while an RR of 40 in the United States is a bit high and likely leads to problems, it is nothing compared to the numbers we see in developing nations, where countries like Bangladesh, Somalia and Bolivia have RRs that can easily exceed 1,000. And while an RR of 200 is likely a shorthand way of saying that all the richest people in the country are deciding the policies of the country, an RR of over 1,000 is utterly tragic, and it suggests that the members of Parliament are totally out of touch with the rest of the population. These are countries that exist almost without government, as the rich own the biggest houses, hide behind big walls, have luxury armored cars and use squadrons of machine-gun carrying guards.
And, no matter how well-intentioned these wealthy members of Parliament might be in countries with high RRs, there is little chance for richest people of say Burundi or Bangladesh to empathize with the daily problems (corruption, institutional capacity) encountered by the poor. Indeed, in these countries, the wealthy live in an alternative universe, as they have no problem patching the problems of what might be perceived as sclerotic and corrupt institutions and decaying infrastructure. They can readily pay petty bribes to skip lines and get government approval for their businesses. But these same petty/inexpensive bribes for the wealthy are impossible hurdles for the poor.
A Metric and a Goal
Getting to One
Clearly the ideal Representative Ratio would be 1. Indeed, this notion is tautological: For a representative body to be truly representative the agents must be as much like the principals as possible, and that is achieved only when the body is inclusive and, by definition, when the RR = 1. And while there are numerous, other, more complicated measurements of a representative body, wealth is certainly one of the most important and the least subject to debate. Thus, the easiest and most natural way to objectively measure the effectiveness of a democracy would be through this simple measurement of wealth.
Call For Data
November 3, 2017
If you have access to this type of data, for any country or state, please contact us at  firstname.lastname@example.org. We are looking for both the median net worth of the country’s members of parliament and the median net worth of that same country’s citizens.
RR and Transparency
At CRI, our major focus is on the pernicious and overwhelmingly negative aspects of congressional (parliamentary) transparency. But numerous scholars (i.e. Monika Bauhr and Alina Mungiu-Pippidi) do not see transparency as problematic. This is because less transparent democracies tend to produce poor legislative outcomes. The trouble with their work is that they analyze democracies using only a small number of variables, where transparency measurements are central to their work. And sure enough when all democracies are compared with only one or two variables, they get their (desired?) results.
But leaving out things like recent-civil wars, overthrows, extreme poverty and representative ratios can be dangerous. Indeed we find that RR is a powerful confounding factor when it comes to broad multi-country transparency analysis. This is because an extremely high RR can often overwhelm other factors. In such cases, we might even recommend more transparency, but that is simply throwing in the towel. The proper solution is to limit RR and reduce transparency.
The Presidential Ratio
Simply solving the representative ratio does not solve all the possible inequalities in government. There can exist another similar problem between the executive branch and both the judicial and legislative branches. As we often see, the Presidents of developing countries often have enormous power over the members of parliament. Clearly this needs to be solved. In Uganda for instance, when the legislators are elected, the President immediately hires them to a second post in government, which allows him to pressure them directly and threaten them with their second salary.
Further, Presidents often become enormously wealthy and have the ability to pressure legislators or justices simply through the financial powers. And by playing games with their government power, they can strip legislators (or threaten as much) of their wealth, house, etc. So, in many countries we find that there is not only an exceedingly high (and unrepresentative) RR, but there is an equally pernicious PR (Presidential Ratio) that needs to be considered.
Methods to Control RR
One important way to lower RR would be ranked-choice voting and proportional representation. But it is likely other safeguards must be put in place as well. Often, however, the simple public awareness of a problem helps, and thus simply measuring and broadcasting the RR of various countries would likely effect election choices. Further, outside pressures can help too, and aid or trade deals can be based on countries lowering their RR to reasonable values.
Other Rough Notes
We believe that this ratio is an essential tool for measuring a democracy and ideally it should always be equal to one. But in reality, this is never the case. In the USA the ratio of representative wealth to that of the average citizen is close to 40. And in some countries this ratio soars well above 100. This is likely divisive, as the central job requirement of a country’s legislators is to control the economy of the nation and rich legislators will clearly approach the economy differently than poor ones. As such, a high ratio is bad news for the constituents, particularly, but not exclusively the poor and middle class.
Generating simple statistics such as the representative ratio create a type of ‘money ball’ approach to democracy. While these same approaches have worked well for professional sports, we tend to ignore them in our government. A representative ratio is a simple and powerful glimpse at the health of a democracy and appears essential for measuring the legitimacy of a government and could be an essential tool for determining foreign aid and developing institutions.
NOTE: Another question arises here. We should also analyze what appears to be a fault with elections in general. It seems likely that elections, by their very nature, predispose our representative body to be far wealthier than average. If this is the case (and if we cannot solve this), numerous election problems can be solved in one fell swoop, with a lottery instead of a vote. No other system solves voter fraud, election turnout, primary problems, proportional representation, etc. better.
Getting to One
A Couple More Notes
RR in Developing Countries