I’m interested in the topic of ideal governance: what kind of governance system should you set up, if you’re starting from scratch and can do it however you want?

Here “you” could be a company, a nonprofit, an informal association, or a country. And “governance system” means a Constitution, charter, and/or bylaws answering questions like: “Who has the authority to make decisions (Congress, board of directors, etc.), and how are they selected, and what rules do they have to follow, and what’s the process for changing those rules?”

I think this is a very different topic from something like “How does the US’s Presidential system compare to the Parliamentary systems common in Europe?” The idea is not to look at today’s most common systems and compare them, but rather to generate options for setting up systems radically different from what’s common today.

I don’t currently know of much literature on this topic (aside from the literature on social choice theory and especially voting methods, which covers only part of the topic). This post describes the general topic and why I care, partly in the hopes that people can point me to any literature I’ve missed. Whether or not I end up finding any, I’m likely to write more on this topic in the future.

Outline of the rest of the piece:

• I’ll outline some common governance structures for countries and major organizations today, and highlight how much room there is to try different things that don’t seem to be in wide use today. More
• I’ll discuss why I care about this question. I have a few very different reasons:
  • A short-term, tangible need: over the last several years, I’ve spoken with several (more than 3) organizations that feel no traditional corporate governance structure is satisfactory, because the stakes of their business are too great and society-wide for shareholder control to make sense, yet they are too early-stage and niche (and in need of nimbleness) to be structured like a traditional government. An example would be an artificial intelligence company that could end up with a normal commercial product, or could end up bringing about the most important century of all time for humanity. I wish I could point them to someone who was like: “I’ve read all of, and written much of, the literature on what your options are. I can walk you through the pros and cons and help you pick a governance system that balances them for your needs.”
  • A small probability of a big future win. The world today has lots of governments, but they seem to mostly follow a very small number of basic governance templates. At some point, there will be new states with new Constitutions – maybe via space settlements, maybe via collapse of existing states, etc. – but I expect these moments to be few and far between. A significant literature and set of experts on “ideal governance” could lead to a radically different kind of state government, potentially with radically different policies that the rest of the world could learn from.
  • A weird, out-of-left-field application. Some of my interest in this topic actually comes via my interest in moral uncertainty: the question of what it’s ethical to do when one is struggling between more than one theory of ethics, with radically different implications. This is hard to explain, but I try below.
• I’ll describe a bit more what I think literature on this question could look like (and what already exists that I know of), partly to guide readers who might be able to help me find more.

Common governance structures today

All of these are simplified; I’m trying to illustrate the basic idea of what questions “ideal governance” is asking.

• A standard (e.g., public) corporation works like this: it has shareholders, assigned one vote per share (not per person), who elect a board of directors that governs by majority. The board generally appoints a CEO that it entrusts with day-to-day decisions. There is a “constitution” of sorts (the Articles of Incorporation and bylaws) and a lot more wrinkles in terms of how directors are selected, but that’s the basic idea.
• A standard nonprofit is like a corporation, but entirely lacking the shareholder layer – it’s governed directly by the board of directors. (I find something weird about a structure this simple – a simple board majority can do literally anything, even though the board of directors is often a somewhat random assortment of donors, advisors, etc.)
• The US federal government is a lot more complex. It splits authority between the House of Representatives, the Senate, the Presidency and the Supreme Court, all of which have specific appointment procedures, term limits, etc. and are meta-governed by a Constitution that requires special measures to change. There are lots of specific choices that were made in designing things this way, and lots of things that could’ve been set up differently in the 18th century that would probably still matter today.
• Other democracies tend to have governments that differ in a lot of ways (e.g.), while being based on broadly similar principles: voters elect representatives to more than one branch of government, which then divide up (and often can veto each other on) laws, expenditures, etc.
• When I was 13, the lunch table I sat at established a Constitution with some really strange properties that I can’t remember. I think there was a near-dictatorial authority who rotated daily, with others able to veto their decisions by assembling supermajorities or maybe singing silly songs or something.

In addition to the design choices shown in the diagrams, there are a lot of others:

• Who votes, how often, and what voting system is used?
• How many representatives are there in each representative body? How are they divided up (one representative per geographic area, or party-list proportional representation, or something else)?
• What term limits exist for the different entities?
• Do particular kinds of decisions require supermajorities?
• Which restrictions are enshrined in a hard-to-change Constitution (and how hard is it to change), vs. being left to the people in power at the moment?

One way of thinking about the “ideal governance” question is: what kinds of designs could exist that aren’t common today? And how should a new organization/country/etc. think about what design is going to be best for its purposes, beyond “doing what’s usually done”?

For any new institution, it seems like the stakes are potentially high – in some important sense, picking a governance system is a “one-time thing” (any further changes have to be made using the rules of the existing system¹).

Perhaps because of this, there doesn’t seem to be much use of innovative governance designs in high-stakes settings. For example, here are a number of ideas I’ve seen floating around that seem cool and interesting, and ought to be considered if someone could set up a governance system however they wanted:

• Sortition, or choosing people randomly to have certain powers and responsibilities. An extreme version could be: “Instead of everyone voting for President, randomly select 1000 Americans; give them several months to consider their choice, perhaps paid so they can do so full-time; then have them vote.”
  • The idea is to pick a subset of people who are both (a) representative of the larger population (hence the randomness); (b) will have a stronger case for putting serious time and thought into their decisions (hence the small number).
  • It’s solving a similar problem that “representative democracy” (voters elect representatives) is trying to solve, but in a different way.
• Proportional decision-making. Currently, if Congress is deciding how to spend $1 trillion, a coalition controlling 51% of the votes can control all $1 trillion, whereas a coalition controlling 49% of the votes controls $0. Proportional decision-making could be implemented as “Each representative controls an equal proportion of the spending,” so a coalition with 20% of the votes controls 20% of the budget. It’s less clear how to apply this idea to other sorts of bills (e.g., illegalizing an activity rather than spending money), but there are plenty of possibilities.²
• Quadratic voting, in which people vote on multiple things at once, and can cast more votes for things they care about more (with a “quadratic pricing rule” intended