“Quadratic Voting” and “Common Ownership Self-Assessed Tax”
Audrey Tang, Sheau-Tyng Peng
June 27, 2019
This blog is reposted with permission from Public Digital Innovation Space (PDIS), Taiwan’s government innovation lab.
🗳 As I have mentioned earlier in this column, this year’s Presidential Hackathon has successfully adopted the newly invented quadratic voting (QV) system so that the voting results for proposals will be more in line with the needs of the people. Incidentally, the Colorado state legislature in the United States had also used QV to vote on their budget priorities. Taiwan and the US have achieved significant milestones in the establishment of a new form of democratic governance in administrative and representative politics respectively.
🎪 QV is part of the recent “radical” intellectual current. In 2018, the inventors of QV, Principal Researcher at Microsoft Research Glen Weyl and Eric Posner from the University of Chicago Law School co-authored the book “Radical Markets.” In addition to the articulation of QV, the book offers five different proposals on how to change the way our societies are modeled. The book led to heated debates in academia and the community, and was featured by “The Economist” as one of the books of the year.
📢 Glen Weyl and Eric Posner believe that with regard to public affairs, individuals tend to hold different opinions and are reluctant to share their private knowledge with others. If more people can be encouraged to share their genuine opinions through well-designed market mechanisms, the society can work collectively to find better solutions to existing problems. The QV system hinges on the idea that “a higher concentration of votes requires more points,” which encourages people to vote according to their true preferences instead of concealing their actual inclinations.
💰 Another novel concept in the book is the Common Ownership Self-Assessed Tax (COST), which allows people to declare the price of their assets but for which they would have to pay an annual fixed tax. If a buyer offers to purchase the asset at the declared price, the owner of the asset cannot refuse to sell.
🛒 The idea behind COST originated from the fact that although a person’s appraisal of value may be subjective (especially for intangible assets), this “Harberger Tax” mechanism can still effectively discourage price gouging as well as promote transparency, increase liquidity, and prevent hoarding. Through market design, people can share their actual preferences and information with others, which is the origin of the radical market.
🌎 Glen Weyl and Vitalik Buterin (co-founder of Ethereum) launched the RadicalxChange (RxC) Foundation to advance these principles, and I was invited to work pro-bono as a board member along with the political philosopher Danielle Allen. In the past, civil servants were prohibited from holding concurrent appointments in foreign non-profit organizations, but after this restriction was lifted by the Ministry of Civil Service in October last year, all civil servants can now participate in international organizations in social innovation with the prior permission of the authorities. This was also a change that we had pushed for in the public sector.
💡 The evolution of social innovation is based on different intellectual trends. The theories and methods developed by these currents are an important means by which we can achieve our social mission. Starting from the accomplishments of QV in Taiwan and the US, I hope that my civil servant colleagues can be more active in international non-profit organizations in the future and imbibe prevailing intellectual currents more swiftly. These ideas can be applied to their official work and be a source of inspiration for social innovation in Taiwan, which will in turn be disseminated to the international community and contribute significantly to the world.