Informational limits to democratic public policy: The jury theorem, yardstick competition, and ignorance

Condorcet’s jury theorem provides a possible explanation for the success of democracies relative to other forms of government. In its modern form, the jury theorem predicts that majority decisions are well informed, because they are based upon far more information than possessed by any single individual. On the other hand, it is evident that democratic politicians and policies are not always as good as the jury theorem implies they should be. This paper uses simulated elections to explore the power and limitations of majority rule as an estimator of candidate quality or policy effectiveness. The simulations demonstrate that slightly informed voters can make very accurate choices among candidates using majority rule. However, as the ratio of slightly informed voters relative to ignorant voters falls, the accuracy of majority decisions declines. The latter implies that institutions, policies, and technologies that promote the dissemination of information also tend to improve the efficiency of democratic governance.