A bicameral structure divides members of the legislative branch into two separate decision-making bodies, or chambers. This structure requires each legislative proposal to be approved at least twice, obtaining a majority vote in each chamber before it can become law. Montesquieu first put forth the idea of separate legislative chambers as an institution to limit the ability of one group to use its majority status to dominate the minority, and the first experiment with bicameralism appears to be in 14th Century England. Since then bicameralism has been widely praised as the best possible compromise between constituents of "common people," typically, best represented in the lower chamber, and aristocrats, represented in the upper chamber, to prevent each organized interest from plundering the other (Tsebelis and Rasch, 1995; Tsebelis and Money, 1997). In James Madison’s words, "the improbability of sinister combinations will be in proportion to the dissimilarity of the two bodies" (Federalist No. 62).
In the early Twenty-first Century roughly one-third of the world’s democracies employ a dual-chambered legislative branch; however, among more developed democracies the bicameral legislature is the dominant institutional choice. Bicameralism has not always been the norm, even in the United States where all but one of the states have bicameral legislatures; instead, it evolved from unicameral systems used in the pre-Revolutionary war era. Initially, most American colonies had single chamber legislatures whose members represented different coalitions of citizens. These coalitions ultimately grew and then separated into distinct chambers for passing laws. By the time of the founding of the United States in 1789 only Pennsylvania and Georgia still operated under unicameral systems. At the national level, the United States’ first legislature under the Articles of Confederation was unicameral, a contentious element with the Articles. Drawing on this experience, the Framers feared that assigning legislative power only to states or to the population as a whole would result in the tyranny of majority by small population states or large population states. The eventual compromise over constituent representation was deemed so important to the constitutional convention that it was dubbed the "Great Compromise." The adoption of a bicameral system under the new Constitution, with two legislative bodies differently composed, was considered a progressive step to alleviate many of the problems with the former system.
Modern scholars who have analyzed bicameralism using formal techniques generally reach a common conclusion, one that reinforces the Framers’ intuitive logic (Hammond and Miller, 1987; Brennan and Hamlin, 1992; Riker, 1992; Perrson et al., 1997; Tsebelis and Money, 1997; Diermeir and Myerson, 1999). A bicameral structure predictably protects minority interests through two channels, which we label constituent homogeneity and legislative stability. We describe each channel, discuss empirical measures of bicameralism, and conclude with a summary of studies that examine the effects of bicameralism on policy making and fiscal outcomes.
1. Constituent Homogeneity
Seminal works in modern political economy posit that the major effect of bicameralism stems from different bases of representation in the two chambers. Tullock (1959) first noted that a second legislative chamber dampens the inherent problem of tyranny of the majority much like the adoption of inclusive voting rules (for example, a rule that requires a two-thirds majority to approve legislation). The requirement to satisfy legislative preferences in two differently composed chambers decreases the likelihood that a minority’s interests will be ignored in the final agreement (Buchanan and Tullock, 1962; Stigler, 1976; Crain, 1979; Hayek, 1979; Tsebelis and Money, 1997; Bradbury and Crain, 2001, 2002).
If the composition of chambers leads to differing policy preferences for the median representative in each chamber, these differences predictably affect legislative outcomes. Consider the extreme case in which the districts in the two chambers hold no constituents in common. As Gilligan et al. (1989) note, in that case "when different interests dominate different houses, each interest, in effect, holds a veto over legislation." However, as the difference shrinks between the median voters in the chambers, it becomes increasingly easy for the two chambers to reach consensus on policy. More similarity across the two chambers facilitates inter-cameral trade, because as constituencies across chambers become more similar, bicameral chambers will be more likely to agree on which constituents to tax or to subsidize.
The homogeneity of constituencies raises potentially observable implications. First, two chambers with quite different constituencies should experience less spending on redistributive projects than two chambers with similar preferences. Second, spending on public goods should increase as constituent diversity across chambers increases. As redistribution becomes difficult, and therefore relatively less likely to occur, constituents will be more willing to bear higher tax burdens because revenues will be devoted to expenditures on public goods.
2. Legislative Stability
Riker (1992) and Levmore (1992) tout the second virtue of bicameralism: the use of dual legislative chambers to reduce the feasible set of policy outcomes, which in turn produces stability in legislative outcomes. If preferences are multi-dimensional and unstable, fiscal policy may cycle with changes in the majority coalition over time. A bicameral structure may reduce cyclical majority problems by excluding many non-Condorcet-winning majorities from the legislative choice set. If the legislature enacts a law that can be defeated by the formation of a new coalition, a change in legislative preferences, or legislative turnover, policy outcomes will change frequently. This can impose costs on the economy through the instability of laws and by encouraging legislators to act strategically to maximize profit from short-run majority tyranny in response to cycles. A dual chamber legislature induces legislative stability similar to a supermajority rule, yet it has the advantage of allowing majority agreement on single-dimension policy issues that do not cause policy cycles. For instance, spending decisions regarding public goods, on which there is likely to be stable majority agreement, will pass under a simple majority rule. However, under a supermajority requirement these projects might not pass even though they would not increase budget swings. Bicameralism uniquely reduces the passage of non-Condorcet winners on multidimensional issues while allowing majority agreement on single-dimensional issues.
Dixit et al. (2000) provide a related argument for why a bicameral legislature is superior to a unicameral chamber operating under a supermajority rule. In the model, two interests vie for the power to make political decisions. The party in power may use its status to exploit the minority or adopt general rules. Because this is a repeated game parties may decide to enter into agreements so that the ruling party will not exploit the minority. The current party knows that in the future the minority party may come to power and punish the current party for wealth reducing policies. Under a simple majority rule, party dominance is more likely to change than under supermajority rule where the defecting party cannot be punished until the exploited party gains the necessary representation. A party changeover in power is less likely under a supermajority rule, because the minority power must obtain a larger vote-share than it would under simple majority rule. Thus, the ruling party will be more willing to renege than it would be under a simple majority rule, because of the reduced chance of retaliation or the retaliation is far in the future.
Thus, bicameralism offers a second advantage in protecting minority interests relative to a unicameral chamber with a supermajority rule. Bicameral chambers composed of opposing interests can continually enforce legislative agreements rather than relying on the threat of retaliation to enforce legislative bargains over time, which is the only enforcement option in unicameral legislatures. If different interests control the chambers then the parties do not have to enforce legislative agreements through retaliation over time. A veto player limits the likelihood of minority exploitation in each period.
3. Measures of Bicameralism and Empirical Studies
Several empirical papers stress the many variations in bicameralism, even among the American States. Early empirical studies of American state bicameral chambers, such as Crain (1979) and McCormick and Tollison (1981) observed differences in chamber size affect legislative output. Crain (1979) finds as chamber sizes become more equal legislative output, measured in terms of legislation passed, increases. McCormick and Tollison (1981) find that more equal chamber size leads to economies of scale in redistributive lobbying, and thus increases redistributive activity. More recently Bradbury and Crain (2002) examine bicameral differences using proxies of constituent preferences. The empirical model measures bicameralism not a discrete structure, but rather a continuous institutional arrangement based on the degree of constituent homogeneity across chambers. This ranges from identically composed chambers to totally different bases of representation across the chambers. In this perspective, as the chambers’ demographic characteristics become more diverse the legislature becomes increasingly "bicameral." Changes in the identity of the median legislator within each chamber alters the degree of bicameralism, and determines the similarity of the dominant coalitions between the two chambers. To reiterate, the impact of bicameralism on policy comes principally from the different bases of representation across the two chambers. Moreover, measured in this way, the degree of bicameralism, at least in American legislatures, changes regularly as a consequence of the redistricting process.
The theoretical analysis predicts that bicameralism should make spending more efficient — not simply limit the spending level — by limiting agreement to the set of policies agreed upon by the median constituents of both chambers. This suggests that increased bicameralism may increase spending in some areas of the state budget but not others. As legislators become less able to seek transfers, they may devote more spending to efficient public goods where they agree. Results for the American States indicate that bicameralism is positively related to education expenditures, highway expenditures, and total expenditures, in other words programs that might be considered public goods. In contrast, bicameralism is negatively related to expenditures on welfare and other redistributive programs.
Internationally, Bradbury and Crain (2001) examine the discrete difference between bicameral and unicameral systems in different countries. Specifically, this study examines the effect of the bicameral institution on redistributive spending due to the "Law of 1/n," which is pork-barrel spending fueled by an increase in elected representatives. The study finds that countries with bicameral legislatures experience less 1/n spending than unicameral countries, which is consistent with the hypothesis that adding a second legislative chamber limits redistributive spending.
In summary, modern analysis and empirical evidence indicate that bicameral chambers serve the intended purpose of the Founding Fathers to limit government to the protection of the "general welfare." This has particularly strong policy implications for new and developing countries that seek to design constitutions that restrict the government from engaging in harmful redistributive activities.
