Spoliation vs. ‘The right not to lie’: An economic theory of the 2012 political crisis leading to the referendum to impeach the President of Romania

Abstract

Abstract In July 2012, Romania witnessed signs hinting at a possible erosion of political freedom. The paper shows that these signs point to a significant shortfall in economic freedom, deeply rooted in insecure property rights and high corruption. Such a shortage accounts for both the absence of the rule of law and many people’s reliance on the government for a job. Voters reliant on redistribution (mainly employees in the public sector, pensioners and welfare recipients) who actually cast their votes have outnumbered the other voters and have come to think of themselves as the owners not only of the redistribution rights set forth by law, but also of the values of those rights. Thus, excessive redistribution lays the groundwork for the “tyranny of the majority” and explains why the mechanisms to correct excesses cannot be used or are used too late, as they seem illegitimate. The paper presents the particularities of voters reliant on redistribution and the mechanism whereby they may come to agree, even if not wholeheartedly, to the reduction in their political freedoms if this means averting a cut in redistribution incomes. The paper concludes that it is only a matter of time before political freedom deteriorates in the absence of higher economic freedom via enhanced property rights, lower corruption and less reliance on redistribution.