Endgame with Gita Wirjawan - Eric Maskin: Our Voting System Is Broken, Here’s the Fix

Episode Date: March 7, 2026

Get your copy of Gita Wirjawan’s book, “What It Takes: Southeast Asia”, NOW: https://sgpp.me/what-it-takes-ytAnd leave your review here:https://www.goodreads.com/book/show/241922036-what-it-takes------------------------Many of us have, at one time or another, questioned the real impact of a public policy. But Eric Maskin encourages us to shift the focus: instead of asking only what policies do, we should ask how the rules behind them are designed in the first place.A Nobel Prize–winning economist, Maskin is best known for developing the foundations of mechanism design theory. This branch of microeconomics—closely linked to game theory and information economics—examines how to structure rules and incentives so that socially desirable outcomes emerge, even when individuals act rationally and hold private information.In addition to his theoretical work, Maskin has proposed true-majority voting rules as a way to strengthen democratic systems. His approach addresses weaknesses in conventional electoral frameworks, which can be susceptible to elite capture, and aims to ensure that election outcomes more accurately reflect the will of the majority.#Endgame #GitaWirjawan #EricMaskin-----------------------------------------You might also like these episodes:https://youtu.be/eRRMurnQnJU?si=55n3y8sVDTYhhJE-https://youtu.be/CXUgsJYpfvs?si=KBauWO64HWoCi0Athttps://youtu.be/iF9z1G-6i-Q?si=JP2PstD1HjZ9HV3q------------------

I suspect that whoever is elected president in the U.S. in 2028 will be much more attuned to these issues. A little pulse on the ground. Exactly. They see all too clearly what happens if they ignore that. You get someone like Donald Trump, who is very sensitive to the discontents of a population, but has no good solutions to offer. Now that we are attuned to the problems, we just have to make sure that we get the people who have some of the answers in a position where they can implement those answers. But oftentimes we look at democracies being driven by a process that focuses on just electability.

How can we improve upon that pre-existing condition that may not be so ideal? What we need are better election systems to get the leaders with the best ideas into office. I have some optimism that despite power structures, it should be possible to elect people who really are doing something for the majority of the population. Hi, friends. It's a pleasure to tell you that my best of my best is. book, What It Takes Southeast Asia, has been released in English and Bahasa Indonesia. You can buy it through books.endgame.id or at any of these stores. Now back to the show. Hi, friends. Today, we're graced by Professor Eric Maskin, who is a professor of economics and math at Harvard University. Eric, thank you so much for gracing our show.

Thank you for the invitation. I'll usually start off with questions on your upbringing. What made you curious when you were a kid? Or who? Well, I can't say that I was a terribly diligent student from the beginning. I liked school and I liked learning things, but it really wasn't until I got to high school and I had one particular math teacher.

that I realized that thinking about, in this case, math, but I extended that to other things, could be such an exciting and such a rewarding enterprise. He allowed me to see that math is more than just a way of doing calculations. coming up with an answer, but it's a way of creating relationships among numbers. It's a way of understanding mathematical objects,

but by extension, objects in the real world. And that was a revelation to me, and had a deep effect. Speaking of revelations, you often talked about there being beauty in the way math prevails in life. Talk about that.

Well, I think that mathematics has many of the same qualities that art has. It relies, for example, on symmetry. Symmetry is an important concept in math, as it is in the visual arts, even in music. Simplicity is an important quality in math. Understanding something in the most fundamental,

the most elemental way. The greatest art, the greatest music, also has a simplicity about it. And there's also a harmony. That is bringing different ideas which look as though they might not have anything to do with one another into a line. that is that's that's harmony in music where you put different lines which are really

quite different together to make a beautiful whole same thing in mathematics is that why you play a musical instrument well I play I play the clarinet and the piano partly for that reason but partly because it's there there are qualities in in playing music that you don't get in writing an economics or a mathematics paper. Part of playing music is expressing emotions. It provides an emotional relief. And although I think the effect of mathematical work can can elicit emotions, you don't actually get to put your emotions into the paper.

So I like the contrast between performing art where it's all a matter of emotion and scientific work where by the very nature of the enterprise you can't really put your emotion into the work. You talked about symmetry, given the fact that we might be witnessing quite a number of asymmetries now. Did you see math as a remedy? Well, math is a tool.

It's not a remedy, but it can be used to create remedies. So, for example, a lot of my recent work, has been directed toward improving voting systems. I think one of the major shortcomings in my country, the U.S., but this is also true for other countries, is that we have, that we're using voting systems that fail to elect leaders who are most representative of what citizens want.

And in studying all the possible voting systems we could use, we have to use mathematics. A voting system can be represented mathematically and analyzed mathematically. And so math plays a big role in my work on voting systems.

You came up with many things, one of which is the mechanism design theory. Explain that to delay people out there. Mechanism design I like to think of as the

reverse engineering part of economics. Normally in economics we look at existing institutions and we try to explain or predict the outcomes

that those institutions markets, for example, will produce. And that's a very worthwhile enterprise. It's what's called positive economics. But I prefer to do the opposite. That is, I like to start with the outcomes. These are the outcomes we would like to have and then work backwards to figure out what kinds of institutions we could create to achieve those outcomes. So a very particular example of this is a voting system. A voting system can be thought of as a mechanism.

In the case of the voting system, the idea is first to say, well, what kinds of outcomes do we think a good voting system should deliver? and those are the goals, the outcomes we want to achieve. And then from that point, we can work to figure out the actual voting systems that would deliver on those goals. Okay. If I may, I'd like to put that in the context of perhaps Southeast Asia, which is predominantly made up of developing economies, those that earn less than $13,205 per capita per year. Most of the households in these countries are headed up by somebody without a university education.

In Indonesia, about 88% of the heads of households don't have university education. But we seem to be shackled by the idea that democracy ought to be just, manifested in the distribution of power, right, without putting premium on the fact that most, that vote don't have the necessary educational war with awe. How would you take that into account in a proper mechanism design theory for better voting system? In the case of inequalities in education, I would say that the first, step is for leaders to make clear how the number one priority, the number one investment ought to be in education. It doesn't have to be university education, even secondary

education, is important. It's important because, as you say, for democracy to thrive, citizens need to be informed about the democratic options they have, the candidates for office, and the best way for them to become informed is to have the educational background, which teaches them what they need to know. no, in every, in any given election. But education goes beyond its effect on a good functioning democracy. It also helps economically. Clearly it directly affects those who are get educated because with education comes skills which they can then use to get

better employments but it's also good for the for the country as a whole to have a better educated labor force you know as of late I've been thinking of a democracy as something that should represent the ability to better distribute public goods, including education, health care, welfare, social value, moral value, right? But oftentimes we look at democracies being driven by a process that focuses on just electability, as opposed to perhaps whether or the candidate has intellect, has moral value, has social value, has the ability to distribute, you know, health care and welfare to the people. How can we improve upon that pre-existing condition that may not be so ideal? One way is through an election

system, which makes it easier for candidates who are not necessarily backed by some power group to actually run for office and win. I personally have worked on a voting system which is sometimes called true majority rule. It's sometimes called Condorcet voting. And it has the property that even if, as a candidate, you are not being backed by one of the big parties, you still have a decent chance of winning if your message to the public resonates with them.

Because under true majority rule, you win if a majority favors you over each other candidates. So it's not necessary for, let me go back to American politics for a second. It's not necessary if you're an independent candidate to get all of the Democrats to endorse you above a Democratic candidate. And it's not necessary for you to convince all the Republican voters to endorse you over the Republican. rather you are putting together a coalition of voters who will support you against each of the major party candidates. And that's the way to break the stranglehold of power in politics, and that's the way for independence, candidates with good ideas to actually get into office.

So I have some optimism that despite power structures, it should be possible to elect people who really are doing something for the majority of the population. You spent some time in China. You've supervised many academics in China, prominent ones. I meant one or two of them in the past. China just seems a bit paradoxical to me in that their political structure is centralized. But their economic activities seem much more decentralized. Whereas we're seeing many democracies around the world that are politically decentralized,

but not seemingly able to decentralize economic activities. We're seeing much more centralized economic activities. Why is that? And what do you think can be done for the sake of these democracies? or if you have any observations with respect to what China could have done better? Well, so your rough characterization, I think I would agree with, China was able to develop so well economically since the late 1970s, early 1980s, precisely because it did decentralize.

It decentralized in two ways. First, it's allowed many more economic decisions to be taken by markets and private, more or less private companies. It also decentralized. It also decentralized in the sense that rather than all governing coming from the central governments, quite a lot of power was given to local governments, local and provincial governments. And the reason in both cases why those moves worked so well is through a very

simple economic concept competition. Right. In both cases, competition between rivals, either rival companies or mayors. Or rival mayors, induced those parties to perform better. If you're competing, you need to,

apply yourself and perform better. That very simple idea from economics was a major driver of economic improvements. Of economic improvements in China, as we've seen. In recent years, I worry that there's been... a relapse, that is the current regime, rather than continuing to decentralized, has, if anything, re-centralized economic power. And I think that's unfortunate. It's unfortunate for China, but I think it's also unfortunate for the world because it will mean that China

is not as effective as it might be, both politically and economically. What about the counter to that? Your observation with respect to democracies, which have not seemed to decentralize economic activities as well as they should have? Yes, well, let me talk about the U.S. since that's... Feels free to talk about us, too, in Southeast Asia. We're pretty robust democracies, you know. Right. Let's look at what happened in the U.S.

And this actually happens twice in U.S. history. In the late 19th century, early 20th century, there was a great period of economic growth led by oil, led by steel, led by the railroads. and all of that was brought much greater prosperity to the country but it ended up concentrating economic power

in the hands of a very few so fortunately there was a remedy for that the the antitrust legislation and a number of these monopolies were were broken up and that was that was good for

the country it was good for the country in the sense that you didn't have so much power concentrate but it was also good as a way of restoring competition if you're a monopoly you don't have to compete with anyone, you're there alone. Same thing as happens in a different era with the rise of big tech. We now

see these big tech monopolies and sadly not much has been done so far about limiting their power. I firmly believe that we need to do

what we did back in the early 20th century. High time. It's high time. And I think that same lesson doesn't just apply to the U.S. It applies in other democracies as well

where economic power has been too heavily concentrated. It's a little concerning. I mean, one could refer to many sources, one of which is you know, what was written by Darren Osamogel of Power and Progress, where he talked about

how the median wage of the Americans from 1945 until 73 rose 2.5% per year, but ever since the internet, call it the early 70s. It's been stagnant or even flying. Less than 0.5%. It's a bit paradoxical

in that technological innovation has not entailed in the shared prosperity. That's right. And one way of explaining what has happened in recent years is the idea of what's called skill bias technical change, where, yes, we have a lot of new technology, but the people who can best make use of this technology or whose productivity is most enhanced by this technology

are those with high skills. The people without those skills are left behind. And this has been true, certainly in the United States, but for somewhat different reasons, in developing countries too. I've been very interested in the rise of inequality in developing countries because it comes as something of a surprise to the conventional idea of comparative advantage.

According to comparative advantage, if a country becomes more heavily involved in international markets, if it embraces globalization, then that will give that country the opportunity to specialize, in products that make use of its most abundant resource. Now, in rich countries, highly developed countries, that resource is highly skilled workers. So you would expect highly skilled workers to benefit from globalization in rich countries. But comparative advantage would also make you believe that in developing countries, it's the low-skill

workers who should benefit because they're in great numbers. And so we might have predicted, and a lot of people did predict, that globalization was going to reduce inequality in development. countries because it would enhance the demands for low-skill workers. Countries would be specializing in products produced by low-skill workers. Well, that didn't happen. In fact, we've seen inequality increase there as well. I've collaborated with Michael Kramer, well-known development economists, to try to

to understand what has gone on in developing countries. We see it as the outcome not just of the globalization of trade, but also as the outcome of the globalization of production. So production itself has been globalized. Think of computers. Computers might be designed in the U.S. and programmed in Europe and then assembled in China. But in order to do this globalized production,

the demands will be for workers who have some skills. Even in the assembly of computers, you need workers with some basic skills. People who have done subsistence farming all their lives are not going to be part of that labor force. They will not be part of a globalized production process. And that is where we see the greater inequality is coming from. The fact that globalized production calls for workers, at least above some skill level,

and leaves out those who don't meet that skill level. There's also a remedy for that problem, which is, and this comes back to education, to allow much greater numbers of people to acquire the skills they need to be demanded by global production enterprises. Does that explain the kind of revisionism that we're witnessing with respect to the pre-existing international order that would have thrived until recently on a back of unfettered pre-trade, globalization, and peace. Each one of these has been somewhat challenged recently, right? I mean, this falls into your design of mechanism design theory. So don't get me wrong. I am, I think that

on average globalization and for that matter new technology automation are sources of great potential prosperity I am not in favor of stopping globalization or stopping new technology but what we've neglected is the really quite profound distributional inequalities that globalization and new technology have brought. It's been fine for the many people who have benefited, but for the perhaps even greater number of people who have benefited, who have not, we haven't done anything for them. We haven't done enough to bring them into the modern era.

And that's where mechanism design could be useful. In other words, I'm in favor of markets, but not all consequences of markets can be left to be solved by market forces that there are important corrective actions that

society, government needs to take and perhaps the most important is investing in training and education for a modern economy in the absence

of somebody like Roosevelt who could restructure the pre-existing frame and the prevalence of markets not being able to democratize public goods to the rest of the world. What conviction do you have that this will get remedied? I guess it's a matter of time frame, right? It's a matter of time. So I'm a, I'm, I'm, a great believer in looking at historical experience because nothing that is going on now is completely unprecedented. We've seen many of these things before. So take the first industrial revolution, late 1700s, early 1800s.

We remember it now as a time of great productivity and And in fact, over the course of the 19th century, average wages rose at an almost unfathomable rate. They had remained more or less steady for hundreds of years, and then all of a sudden they took off. And this was largely attributable to new technology. However, if you look more carefully at what happens, that increase in wage did not occur immediately. In fact, there was something like a 30- or 35-year lag until it started kicking in because it took that long for people to figure out how to marry labor and machines in a way which would make productivity higher. And before that happened,

there was very considerable social unrest. People were, there were lots of jobs being lost. There was a great increase in inequality, just as there is now. Same thing happens at the beginning of the 20th. century. But in both cases, society eventually caught up and society eventually elected leaders,

like the two Roosevelt's, Teddy and Franklin, who really did something to address the ills of the of the market system. And I, and coming back to politics

and voting systems, I I'm firmly convinced that there are political aspirants out there with great ideas for doing what the

Roosevelt's did as long as they can get elected and so I come back to the point I was making before. What we need are better election systems to get the leaders with the best ideas about economics, politics, into office.

On the assumption that the gap or the divorce between policy and opinion lingers within the U.S. and some other countries, would you argue similarly that the revisionism that comes in a form of, call it, bricks, that wants to serve as a counterweight to the failing international order? might just be episodic, and things might revert back to normalcy when the structural impediments are remedied in due time. You know, I do tend to be an optimist. Me too. In these matters.

I think there is already in any... the U.S. an acute awareness. The politicians who were found for the, what I would call the neoliberal era in which there was very little attempt to correct the ills of capitalism. So there's an acute awareness that that was a mistake. That while they shouldn't be growing markets out, they need to have concrete policies for ensuring that more of the population isn't excluded by the population.

market forces. So I think there's already a corrective underway. I suspect that whoever is elected presidents in the U.S. in 2028 will be much more attuned to these issues. A little pulse on the ground. Exactly. Because they see all too clearly what happens if they that. You get someone like Donald Trump who is very sensitive to the discontents of the population, but has no good solutions to offer. So now that we are attuned to the problems, we just have to make sure that we get the people who have some of the answers in a position where they can implement those answers. I want to take you to the issue of sustainability. I see energy as one of the more underrated unequalizers as it relates to the developing economies. You know, I come from a region where the average electrification per capita is less than 2,000 kilowatt hour per capita when...

The United States and China and all the other developed economies are above 10,000 kilowatt hour per capita. I mean, we keep hearing AI every day, and we know how much disproportionately more it uses energy, you know, compared to pre-existing technological innovation. And at the rate that the developing economies, call it the Global South, you know, are just not adequately energized, they might just be further or left behind. And then inequalities might just exacerbate on the basis of just lack of energy. What's your take on this? And then, yeah.

So it's a real problem. Yes. again, one reason why I have some optimism in this dimension as well is that it seems likely that energy costs are going to fall. They are falling. The cost of solar energy, for example, has come down really quite dramatically in the last 10 years. And it's going, unlike fossil fuel energy, where there's a limit to how far we can go, because there will always be a cost of getting the stuff out of the grounds, with solar, with wind, with water power power. there are many conceivable additional improvements we can make.

And so with the fall in energy production costs, we'll see a greater opportunity for developing countries to pull themselves into the 21st century. technological capital, which will get cheaper, but it also requires economic capital, which unfortunately has not been democratized from where it sits in a concentrated manner to where it needs to be.

I'm concerned that this may continue. It may not change to the extent that economic capital does not get reallocated, does not get further or better democratize in spite of the availability of technological capital the development economies may still not be able to rise up to the occasion well here here again is is where good leadership matters the and and where democratic forms of government have have an advantage not only in being required in some sense to elect officials who are accountable to the public,

but in being able to get rid, and this might be even more important. the ability to get rid of leaders who have failed to address problems such as inequality and unequal power. I want to take you back to where we started, which is education, right? I would argue that teaching is more scalable than parenting. teachers stand in front of 20 to 200 kids, whereas parents in front of two to three kids in general, you're a product of somebody who infused imagination, ambition through your math teacher in high school.

Well, any suggestion on scaling good teachers and developing economies? I mean, just to put in context, teachers in most developing economies, they make about $100 to $200 a month. Well, you're not likely to recruit good teachers that way, right? You're not. So one thing that we do a much better job of now than even a few decades ago is measuring the impact of teachers. it is now possible to track what becomes of the students in a particular teachers class,

how well they do, what their incomes are. And to a remarkable degree, the teacher student relationship, very much affects what happens to students in later life. So better teachers make a huge difference. Take one particular school, two teachers, the students leaving those different classes will have vastly different experiences. So now that it is,

possible to measure the effect and identify who is creating those effects, what we need is a system in which good teachers are paid what they're really worth. And we know what that is. This is something which perhaps teachers' unions will resist because teachers' unions prefer for all teachers to be paid equally. But at a time where there's nothing more important than education as an investment, it is critical to be able to reward the really good teachers. And that is scalable. And as more cost it, the easiest solution would be just raise all the teacher's salaries.

That's not cost effective. You want to raise the salaries of teachers who are really deserving. Deserving. And whose product economic product is highest. You. I'm with you. You're a product of STEM. China allegedly produces 4 to 4.5 million stem products per year. India, 2 to 2.5 million. Southeast Asia, about 750,000, of which Indonesia about 250,000 to 300,000. The United States allegedly less than a million a year. Does that concern you or does that excite you? I'm not, you know, I can't say that I am terribly worked up by the competition with China. It's not a zero-sum game just because China.

Yeah. China is doing well. That is not, or not doing well, that's not a reason for us to overreact. So I am concerned about the future of STEM in general. but it doesn't worry me that at the moment China seems to be doing a better job of it than the U.S. That particular rivalry, I think, is not of the greatest consequence. I would like to see for the sake of development, more stem in Southeast Asia.

Of course, of course. That's, but, you know, for the same reason that I think energy is getting easier to provide at low cost, I think, I think, I think, I think, teaching will be possible to provide at lower cost through technology. We can have many more Zoom classes. We can have even one-to-one interactions between students in Indonesia and teachers in China or teachers in the U.S., That education is also being globalized, and that will help level the playing field and also help unite the world. It takes to Indonesians to shout out, including what we're doing here. Eric, last message on inequalities.

Any particular message on how we can be more optimistic about dealing with and addressing the pervasive inequalities? I tend to be, as I already mentioned, a lesson taker from history in these manners. And every time in the past, where we have seen... a world moving toward greater inequality, that very trend has set in motion forces which bring things back. We saw that in the 20th century, well, we saw it first in the 19th century,

then in the 20th century, I have every confidence that it will happen again, precisely because so many people, so many well-intentioned and well-informed people are thinking about it. Thank you so much. It's been a pleasure. Friends, that was Professor Eric Maskin from Harvard University.

Thank you.