Budget-Setting Points

Because we are funding ongoing agencies, a ballot starts by giving 1 share to each agency.  In our example, that is one-ninth of last year's budget.  This is called a neutral grant because it does not raise or lower the agency's budget.

How does this voting rule give a minority its fair share of power?  The minimum grant a rep may give limits how much a group may hurt an agency.  At the high end, the cost in political cards or influence points limits how much a group can raise its grants to an agency. 

If that cost in cards is not too high compared with the number of cards each rep receives, then a near majority can afford to give almost twice the neutral grant and its cost in cards.  To let a smaller minority maintain an agency's funding, the minimum grant can be raised. (Increasing the number of cards for each rep might help because those cutting an agency are limited mostly by the minimum grant, while those raising it are limited by the number of cards needed to increase a grant.)   (The table below shows how a rep's grant changes affect her card costs. It illustrates progressive costs to discourage dumping and freeriding.)

Features of fair-share Budget-Setting Points (BSP)

Are these criteria necessary and sufficient to discourage exaggerated votes and empower minority reps?  Incentive systems are only as good as the behavior they evoke.  Since that varies from one setting to another, the system must adapt.  The cost schedule below meets the seven criteria. It can cover a range of incentives from mild to severe depending on how many cards the reps start with.

 
The Cost in Cards for Increasing or Decreasing a Grant

The card cost is zero for a neutral grant (100%) and symmetrical to each side.

There probably are several very good formulas for fair-share budget setting, just as there are for proportional representation.  Experience will reveal which are best in particular settings.  The networked ballot and tally software below use a square-root formula adapted from theoretical work by Hylland and Zeckhauser.

Ballots

1) The ideal method lets voters see and quickly react to each others' votes as they happen. That means having a computer for each voter and linking them together through a secure local network.

2) A less expensive method lets each vote take a turn at one of the computer voting booths

3) A paper ballot asks a voter to grade the agencies from A to Z with no ties allowed.
The voter also chooses a funding curve, either
No tails, raises A, B, C, D... and lowers ...W, X, Y, Z.
High tail: raises A, B... as much as you can; lowers K-Z a little.
Low tail: raises A-P a little; lowers ...Y, Z as much as you can.
High-low tails: raises A (A and B if they are cheap); lowers Z (Z and Y if they are cheap); changes others very little.

Each curve uses all of the voter's money and influence points. Voters don't need to worry about running out of money of cards. He does not need to free up money by lowering a budget before he can raise another budget.

All three methods work best if the voters have [3] chances to look at the budgets and change their ballots.

Councils can use local-network ballots that show the current budgets totaled from all reps.  Click the pictures below to download a working ballot for Excel 5 or later.  Budget_Set.zip is a 475K zip file with a tally sheet and 9 linked ballots. It can be expanded for more voters.

The fact that reps are limited by both their share of money and by their share of political cards makes this rule a little hard to explain -- but it is easy to vote.  The software lets you enter either money or cards and then calculates the other for you.  You can enter the money you want to grant Agency B and let the software tell you the cost in political cards.  Or you can enter the political price you're willing to pay and let the software tell you how much that adds to (or subtracts from) the budget.

This program is simple compared to Movable Money Votes for funding projects.  MMV software works hard to optimize the set of winners based on the grades voters give to proposals.  VIP software, on the other hand, lets the each rep adjust her votes as she tries to optimize her results.

The next page will show the rule's incentives and distribution of power even more clearly by testing it with coalitions of various sizes.  It strongly motivates reps to build large coalitions.