Representation and Intensity of Preferences: A Political Economy Analysis of Liquid Democracy

Abstract

Following an increasingly large corpus of literature championing blockchain-based voting systems and, in particular, Liquid Democracy, this paper proposes a theoretical analysis based on political economy on the issue completing the current literature which focuses more on technical issues. Differentiating between Liquid Democracy as a voting tool and as a new form of democracy, I argue that the former offers the opportunity to vote for more inclusive decisions and to better reflect voters's intensity of preferences delegation and logrolling. However, the latter does not benefit from these positive outcomes as it faces major limitations at large scales because it fails to provide a framework for bundling and for legislative work. I conclude that, for now, Liquid Democracy is more suited to local democracy or small-scale homogeneous groups than to larger-scale systems (such as national constitutions). Along the paper, I discuss blockchain-based examples of Liquid Democracy to illustrate the analysis and link it with recent literature.

Keywords: Public Choice, Liquid Democracy, Blockchains, Calculus of Consent

JEL Classification: D72,P16,P35