Referendum and the Choice between Monarchy and Republic in Greece

Forthcoming inCONSTITUTIONAL POLITICAL ECONOMY

DOI 10.1007/s10602-009-9078-4

George Tridimas

Abstract

Drawing on the 1974 Greek parliamentary elections and constitutional referendum which abolished the monarchy, the paper employs a spatial decision model to examine the strategic use of a parliamentary election and a non mandatory referendum by an agenda setter. The parliamentary election bundles two issues, the right to form a government and the right to choose the form of state. This implies that the election campaign efforts to attract votes are different from the campaign efforts to win an election for government and a separate referendum for the form of state. The choice of the agenda setter turns out to depend on his costs of campaign efforts in the different contests relative to those of the opposition, his benefits to be gained from winning the different contests, his comparative electoral appeal and the probability that the referendum secures his favourite outcome.

Key words: Greece; monarchy versus republic; non-required referendum; parliamentary elections; campaign effort; constitutional revision.

JEL classification: D7; N4

March 2009

G. Tridimas. University of Ulster,Newtownabbey, Co. Antrim, BT37 0QB, UKE-mail: G.Tridimas@ulster.ac.uk

Referendum and the Choice between Monarchy and Republic in Greece

Constitutional changes have often been ratified by holding a referendum. A long line of

scholarship has inquired the comparative benefits of democratic decision making directly by

the voters in a referendum and indirectly by elected representatives in parliament. There

seems to be a wide consensus in the literature that deciding an issue of public interest by a

referendum confers important benefits to the citizenry by involving the voters directly in the

process of decision making. Typically, the existing volume of work considers the

referendum as an alternative to the election for representatives, who decide the issue of

public interest. The present paper extends and complements this line of inquiry by

examining why an agenda setter chooses to call an election to decide some issues and a non

mandatory referendum to settle some other issues, even though they could have been

decided by the elected representatives.

In its analysis the paper draws on the experience of Greece, where the question of the form

of the state, monarchy or republic, was put to a referendum six times in the period 1920-

1974, while all other questions of policy and constitutional arrangements have always been

decided by politicians elected in parliamentary elections (when not under authoritarian rule).

The monarchy in Greece had a turbulent time, with four kings out of a total of seven

deposed during the period 1832-1974. None of the six referendums about the monarchy was

in any way constitutionally mandated, they were all held at the discretion of the incumbent

governments. Both theory and practice have shown that a referendum may significantly

change the result of the legislative process of representative democracy. Calling a

referendum therefore, especially when there is no constitutional requirement to do so, may

imply significant political risks and trade offs for a political ruler who acts as the agenda

setter. What determines the choice of the agenda setter to call a referendum? This question is

the subject of the present work.

The experience of the sixth referendum on the monarchy in Greece in 1974 is instructive: In

1974 after the collapse of the dictatorship there were two popular votes, first, a

parliamentary election to produce a democratic government and vote in a new constitution;

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second, a referendum to either restore the monarchy or proclaim the country as a republic.

Contrary to its predecessors, the pro-republic outcome of the 1974 referendum and the 1975

constitution which followed have proved long lasting and sufficiently flexible to allow

orderly alternation of political parties in office and two constitutional revisions in

accordance with the existing provisions.

The paper analyses the choice of the agenda setter to call a parliamentary election and to

hold a non mandatory referendum to determine different issues of public interest. Even

though the focus is on Greece, the question of how the agenda setter chooses to combine

different voting mechanisms addresses a more general issue and as such, it is hoped, of

wider interest.

The paper is structured as follows. By way of background, Section I summarises the

history of the monarchy in Greece; it describes and compares the referendums (including

fraudulent ones) that took place on its status and gives a detailed account of the 1974

referendum and the constitutional arrangements that followed it. Section II offers a

selective survey of previous work on the referendum including a comparison to

representative democracy, while Section III reviews earlier studies which also examined

the use of the referendum as a means to advance the interests of an incumbent

government. Section IV develops the theoretical argument of the paper. It examines the

choice of the political ruler – agenda setter in a spatial decision framework where the

expected outcomes of an election and a referendum depend on the utility from winning a

vote, policy preferences and the effort expended to attract the support of the electorate.

Comparison of the net expected payoff under the two mechanisms identifies the

conditions which lead the agenda setter to call a referendum in order to advance his

interests. The analysis in the paper is positive and concentrates on the choices of the

agenda setter which maximise his expected utility leaving aside normative questions of

whether an issue should be decided by a referendum on some normative criteria. Section

V concludes.

I. Brief history of the monarchy and referendums about the monarchy in Greece

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1 From monarchy to republic

In a monarchy the head of state is hereditary and holds the position for life, while in a

(democratic) republic it is elected and serves for a limited term. The monarchy in modern

Greece had a turbulent and troubled history which had been inextricably linked to both

domestic and foreign policy developments. 1

After the War of Independence against the Ottoman Empire, Greece was recognized as an

independent state in 1832 and Otto Wittelsbach, a Bavarian prince, was chosen as king. Otto

ruled as an absolute monarch until 1843 when he was forced to grant a constitution 2 and

was eventually deposed in 1862. In 1863 George Glücksburg, a Danish prince, was chosen

as king and a new constitution came into effect in 1864, by which Greece was proclaimed a

“crowned democracy”, a democracy with a monarch. 3 George I was assassinated in 1913

by a madman and was succeeded by his son Constantine I. The king insisting that Greece

stayed neutral during WWI clashed with the elected prime minister, E. Venizelos, who

argued for Greece to join the Entente. The rift precipitated a deep national schism dividing

the country into two bitterly opposed camps of royalists and anti-royalists (also called

Venizelists). Bowing to very strong pressures Constantine I gave up the throne in 1917 but

without formally abdicating and went into exile with his eldest son, George. He was

succeeded by his second son Alexander.

After the untimely death of Alexander in 1920, and the electoral victory of the royalist

parties in the same year, a referendum resulted in a 99% majority for the return of

Constantine. Even though the actual size of the majority was manipulated, it appears that

there was sufficient support for his return to win in a fair ballot. 4 It bears noting that the

1 For the advantages that monarchy could confer to a modern democracy see, for example, Lijphart, 1999, and Bogdanor, 1996)

2 See Congleton (2007) for a formal political economy analysis of the shift of power from the kings to parliaments that took place in the 19th century.

3 It is worth noting that in the Greek language there are not separate words for “democracy”, the system of government where political decisions are made by the people through a competitive electoral process, and “republic”, the form of state where the head of state is not hereditary. The Greek translation of “republic”, a Latin word, is “democracy” - δημοκρατία.

4 See, for example, Clogg (1986).

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referendum was not about the constitutional arrangement as such, but about the person to sit

on the throne. However, in the aftermath of Greece’s heavy defeat in Asia Minor by Turkey

in 1922, the military staged a coup which brought down the pro-royalist government and

forced Constantine to abdicate. He was succeeded by his son George. With mounting social

and economic problems5 the anti-royalist current grew so strong that in 1923 George II was

forced to go abroad on ‘leave of absence’ and in March 1924 the anti-royalist government

passed a parliamentary resolution abolishing the monarchy. A referendum in November

1924 recorded a 30% vote against the monarchy and 70% vote in favour of a republic. 6

The Republic, whose constitution was ratified by the parliament in 1927, was short lived. 7

The 1935 election (not contested by Venizelist parties after a failed putsch of Venizelist

officers) resulted in a huge pro-royalist majority, which promptly restored the monarchy. A

new referendum was held which returned a blatantly rigged vote of 98% in favour of the

monarchy. A year later, in 1936, dictatorial rule was imposed with the approval of the king.

In 1941 after the German army overran the Greek forces King George II left Greece. In

March 1946 and in the middle of a savage civil war between the nationalists and the

communists, parliamentary elections were held. With the leftists and the Communist party

abstaining the alliance of the royalist parties gained a substantial parliamentary majority

against the liberals. The nationalist government then held another referendum in September

1946 about the constitutional issue which resulted in a 68% vote in favour of the monarchy.

That vote too was marred by confirmed allegations of fraud. Historians argue that although

the monarchy did not enjoy much support there was widespread opposition to a communist

government and the monarchy was seen as a security against a communist take-over. 8 King

George II returned, but died a few months later in 1947 and was succeeded by his brother

Paul. The civil war ended in 1949 and a new constitution came into effect in 1952. A period

5 Greece with a population of 5 million and a weak economy had to cope with the influx of 1.3 million refugees from Asia Minor as a result of her defeat.

6 Van Der Kiste (1994) alleges that the referendum was “controlled by the police” but otherwise gives no details. On the other hand, Clogg (1986) notes that territories added after the victorious Balkan Wars against the Ottomans (1912-13) and areas settled by large numbers of refugees from Asia Minor returned overwhelming republican majorities.

7 It was confronted by chronic economic hardship and political instability including unstable parliamentary governments intercepted by coups and cycles of reprisals and purges of royalists and anti-royalists in the civil service and the military.

8 See Clogg (1986), or Gallant (2001).

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of economic progress followed under a rightwing government led by C. Karamanlis, but

tensions between him and the king also developed.

On King Paul’s death in 1964 the throne passed to his son Constantine II. In turn, he

clashed with the centrist PM, G. Papandreou, resulting in the resignation of the latter in

1965. In April 1967 the “colonels” staged a military coup and suspended the

constitutional order. Following an unsuccessful counter-coup in December 1967

Constantine II fled the country and took up residence in London. After suppressing a

mutiny led by navy officers, the military regime abolished the monarchy in 1973. A

referendum followed to legitimise the change. As it was held under military law and

characterised by widespread electoral irregularities, the reported 20% vote against the

monarchy is discredited. 9 The junta collapsed in July 1974 amid mounting political and

economic problems and the threat of war against Turkey and C. Karamanlis formed a

government of national unity. The right-of-centre government which emerged after the

elections, led again by Karamanlis, held a new, this time clean, referendum about the

form of the state which recorded a 69% vote against the monarchy. In 1975 a new

constitution was promulgated introducing a “presided” parliamentary republic form of

government, a term coined to signify the extent of the prerogatives of the president of the

republic, elected by the parliament, with the power to dissolve parliament, veto

legislation and call a referendum. The constitution also stipulated that the articles which

determine the form of state are not subject to revision. Since then the constitutional

position of the republic has not come under questioning.

Table 1 summarizes the time line of the form of the Greek state and details the six

referendums regarding the monarchy. There is little doubt that the role of the monarchy was

controversial and it often became the source of political and constitutional instability.

9 An additional problem related to the restricted if not distorted choice offered by the referendum, since the ballot asked three questions, namely, (a) approval of the abolition of the monarchy, (b) approval of the constitution proposed by the military government and (c) acceptance of the strongman of the military government, G. Papadopoulos, as president of the Republic, but allowed voters only a single answer “yes” or “no” to all three questions.

Table 1: Form of State and Monarchy Referendums in Greece

Form of State& Reigning Monarch Reign Comment

Referendums on the Monarchy

Date % Votes For OutcomeMonarchy Republic

REPUBLIC 1828 1832KINGDOM 1832 1924House of WittelsbachOtto (1815-1867)

18321862 Absolute ruler until 1843. Constitutional ruler from 1843. Deposed in 1862

House of Glücksburg 1863–1913 AssassinatedGeorge I (1845-1913)

5

Of all the referendums held about the monarchy none was constitutionally required, they

were all held at the discretion of the incumbent government. The 1920, 1924, 1935 and 1946

referendums were preceded by parliamentary votes on the question of monarchy / republic

and in all cases the referendum result turned out to simply endorse the result of the

parliamentary vote. Of course, as normal democratic politics had been suspended, no

parliamentary vote preceded the 1973 referendum of the military government, which

imposed its own constitutional arrangements, nor was any doubt that the junta would have

Table 1: Form of State and Monarchy Referendums in Greece

Form of State& Reigning Monarch Reign Comment

Referendums on the Monarchy

Date % Votes For OutcomeMonarchy Republic

REPUBLIC 1828 1832KINGDOM 1832 1924House of WittelsbachOtto (1815-1867)

18321862 Absolute ruler until 1843. Constitutional ruler from 1843. Deposed in 1862

House of Glücksburg 1863–1913 AssassinatedGeorge I (1845-1913)

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allowed a result rejecting its proposals. The 1974 plebiscite was different. It was the first

referendum on the constitutional question to pass the test of free and fair vote under

universal suffrage (women in Greece were enfranchised in 1956) and it was the only

referendum whose result was not contested by the losing side. In addition, crucially from the

viewpoint of the present inquiry and contrary to all the earlier referendums on the monarchy,

it was not preceded by a parliamentary vote, but it was called as the exclusive mechanism to

decide the constitutional question at a time when a parliamentary election was also held to

settle other issues of public policy and pass a new constitution.

2 The 1974 referendum and its constitutional ramifications

It is useful to detail both the political context and the conduct of the 1974 referendum. After

the collapse of the military regime in July 1974, the transitory national unity government of

conservatives and centrists led by C. Karamanlis announced that parliamentary elections

would be held on 17 November 1974 to be followed by a referendum on the monarchy on 8

December 1974. In addition to its standard legislative powers, the new parliament would

also revise the constitution subject to the referendum verdict. However, the convocation of

the parliament was postponed until 9 December, one day after the referendum. 10 Note that

the form of the state, monarchy or republic, is a constitutional question which in principle

may be separated from the person of the monarch. However, in truth the only way for the

monarchy to continue was for the Glücksburg dynasty to remain on the throne (as opposed

to any other royal house); as a result the constitutional issue and the choice of the particular

person could hardly be separated.

The parliamentary election was won by Karamanlis whose party polled a post WWII

record of 54.4% of the popular vote and secured a huge parliamentary majority (220 seats

out of 300). A large part of the supporters for the conservative government came from the

pro-royalist camp favouring the restoration of the monarchy and the return of

10 As parliament would convene after the referendum Karamanlis then had “a free hand in arranging the details of the referendum and, at the same time, saved him from any embarrassment which the royalists in his party might have caused if Parliament had been in session.” Markesinis, 1974, p. 263.

7

Constantine. The royalists also counted a number of government MPs and cabinet

ministers amongst their supporters (although the exact number is not known), but,

significantly, the PM, C. Karamanlis, was not amongst them. Voters in the referendum

were called to choose between “Uncrowned” and “Crowned”. 11 During the campaign the

pro-royalist and the anti-royalist sides were given the opportunity to present their cases

freely and were afforded equal state-television coverage. Officially, neither the political

parties nor their leaders participated in the referendum campaign. 12 Nor did King

Constantine campaign in person, as he remained in London, but his videotaped messages

were broadcasted. 13 In the end and as already said, 69.18% of the voters voted for

“Uncrowned”.

What stands out is how C. Karamanlis used his powers of agenda control: There was a

general election to produce a government with the task of deciding public policy and the

constitutional arrangements, but the form of state, monarchy or republic, was decided not

by that parliament but by the referendum vote. Thus, the chosen course of elections and

referendum separated the issue of selecting a government from the issue of deciding the

form of the state, while it joined the issue of normal legislative politics with writing

(large parts) of the constitution. Moreover, the king was not in any way encouraged to

return after the collapse of the dictatorship, which removed him from office in the first

place.11 There were some complaints from the anti-royalist camp for not using the word

“Republic”; in turn the royalist voiced concern that the word “Crowned” was printed in dull brown ink in the ballot papers while “Uncrowned” was printed in lighter green ink.

12 “Mr. Karamanlis prevented his own MPs from taking part in the referendum dispute. By keeping the government party outside the dispute Mr. Karamanlis intended to strengthen the impartiality of the result, though his opponents maintain that he merely undermined the royalist cause - an accusation which appears to be supported by the fact that to this day Mr. Karamanlis (unlike E. Venizelos in 1924) has avoided expressing even his personal views on this important issue. However, it is also true to say that the royalists in his party towed the party line with no complaints which surely indicates that either they did not believe in the monarchy very strongly or, that they considered the battle already lost. On the other hand, Mr. Karamanlis would not have obtained the majority he did at the general elections had the royalists in his party known that he was against the monarchy.” Markesinis (1974) p.269, emphasis in the original.

13 Despite the level playing field, B. Markesinis (1974) considers the referendum as a missed opportunity for a serious public debate: “On the whole the campaign, whether for or against the monarchy, was neither creative or inspired. Both sides chose to appeal to the emotions rather than to the reason of the electorate and this was most evident in the two highly emotional appeals addressed by the ex-King to the people.” p. 270.

8

Students of public choice would recognize that the “improvisation” of the 1974

arrangements is not atypical of the “episodic event” of constitutional drafting which

follows the collapse of a dictatorial regime (or other major events), where the revision of

the constitution seldom conforms to the relevant legislation for the amendment of the

constitution. 14 Moreover, the drafting of the constitution by a sitting legislature violated

what Mueller (2005) has called the “first law of constitutional writing, that is, those who

are likely to hold office under the new constitution should not be involved in its writing

lest they draft a constitution to serve their interests and not those of the citizens”, (p. 65,

emphasis in the original). 15

To close this historical account it is noted that the constitution of 1975 was hardly the

final word of constitutional writing as it was subsequently revised in 1986 by the then

socialist government. Amongst other stipulations, the revisions removed the discretionary

powers invested in the hands of the president to dissolve parliament, veto legislation and

call a referendum (which then became the exclusive domain of the cabinet), so that the

form of the state is now described as a parliamentary republic. A further revision took

place in 2001 which introduced new individual rights and organizational rules, but did

not otherwise change the structure and functions of the organs of the state. Contrary to all

pre-1975 constitutional revisions, the amendments of 1986 and 2001 were carried out

according to the provisions for amending the constitution, that is, within the

constitutional order rather than by violating it, indicating that the settlement of 1974/1975

has established a certain degree of constitutional stability which was lacking beforehand.

II. Theoretical analysis of the use of referendum

1. Classification of referendums

14 For an extensive discussion, see Mueller (1996), chapter 21, and Mueller (1999). 15 Indeed, C. Karamanlis was elected President in 1980. He resigned in 1985 protesting

against the constitutional revisions proposed by the then socialist government of A. Papandreou to curtail the powers of the president, subsequently ratified in 1986. He served for a second and final term in 1990-1995.

9

In analysing the referendum process and its effect on collective choice scholars have first

drawn attention to the institutional aspects of a referendum, see for example Butler and

Ranney (1978), Mueller (1996), Hug and Scarini (2000) and Tsebelis (2002) and the

literature therein. Summarising, referendums can be classified on three dimensions;

namely (a) whether their results are binding or consultative; (b) the subject matter of the

vote, that is, what exactly is decided, and of specific importance for our purpose whether

the vote is on a constitutional issue (a rule on how to make policy) or a post-

constitutional issue (a policy, given the constitutional rules); and (c) the initiator, that is,

the political player who calls the referendum. Purely consultative referendums are rare in

practice and probably uninteresting, because when voters know that policy making is not

bound by the referendum outcome their incentives to engage in the collective choice

process are questionable. Referendums to amend constitutions are common in

democracies. Typical constitutional issues relate to national sovereignty, the division of

powers in a polity and the adoption of fundamental rights. Non constitutional issues

regard “bread and butter” policy questions like deciding tax and spending programmes,

with Switzerland and the USA at the state level offering the best known examples. The

third dimension is more complicated. A referendum is required when the constitution

mandates so, for example, to approve a constitutional revision, or when a country has to

cede part of its sovereignty to a supranational organisation like the European Union.

Alternatively, a designated political actor may trigger off a referendum, even though it is

not required by the constitution. There are three types of non mandatory referendums. (a)

When the government calls one even though it can pass legislation through a vote in the

parliament. This is known as a plebiscite or a passive referendum. The Greek

referendums discussed above belong to this category. (b) When the opposition to the

government, parliamentary or an organisation or interest group outside the parliament,

initiates a referendum on a policy proposed by the government. (c) When the opposition,

parliamentary or extra-parliamentary, initiates a referendum on a policy proposed by the

opposition itself. Examples of the latter are the popular initiatives, where a specified

minimum number of signatories can force a vote on their proposed policy and the recall

referendum by which voters may remove an official from office.

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2. Arguments for and against the use of referendum

An enormous and still growing literature has developed to examine how referendums

affect the quality of the outcomes of collective choice, the quality of the democratic

process and the gains they confer to citizens from the act of participation in policy

making – for recent informative surveys see Matsusaka (2004) for a book long survey or

for shorter treatments see amongst others Feld and Kirchgäessner (2000), LeDuc (2002)

and Matsusaka (2005a) and (2005b).

The main arguments in favour of referendums are: (1) Legitimacy of outcome. It is well

known that the outcome of a referendum, which aggregates all votes simultaneously, may

differ from the outcome of a parliamentary vote, which sums votes separately at the

constituency level, a result known as “the referendum paradox”. 16 Since the referendum

outcome reflects decisions made directly by the citizens, it has greater legitimacy than the

decisions made by their representatives. Specifically, the referendum process introduces

popular preferences, typically approximated by the median voter of the electorate, as an

additional veto player in the process of determining policy and may break the agenda

control power of politicians to decide public policy issues; see Matsusaka (2004) for a

thorough study of the evidence. (2) Accuracy of outcome. Decisions made directly by

voters reflect more accurately their preferences in comparison to decisions made by the

representatives of citizens, who may find opportunities to advance their own private

interests, because of free rider problems in monitoring their behaviour. This is the

principal – agent problem which bedevils political representation, where the voters–

principals delegate significant discretionary powers to politicians–agents to decide and

implement policy. (3) Focus on the issue. A referendum forces citizens to focus on the

issue to be decided to the exclusion of other issues, while parliamentary elections are

fought on broader and vague platforms, which bundle issues. This may improve the

incentives of voters to be informed about the issue at hand and participate actively in the

process of collective choice. Moreover, this largely resolves problems of logrolling,

where legislators may trade votes in one issue to secure a favourable vote in another issue

16 See Nurmi (1997) for an analysis of this and other related paradoxes of majority voting.

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combining unrelated issues and resulting in inefficient outcomes. In addition, the

referendum process may lead to better outcomes than decision making by representation

when value issues are decided, like abortion limits, gay rights, stem cell research, etc,

when there may not be an obvious “right” or “wrong” decision (Matsusaka, 2005a and b).

(4) Further, direct democracy increases citizen involvement in politics and knowledge of

the issues which are debated. This pedagogic effect may even have a bigger impact on

citizens and democracy than the substantive on policy making (for a book treatment of

this argument, see Smith and Tolbert, 2004). Better educated and more participating

voters are able to better evaluate politicians and, once more, force them to be better

office-holders. (5) Citizen satisfaction. Irrespective of whether voters are on the winning

side of the referendum, the very act of direct participation in the policy making confers

benefits to the voters (see Frey, Kucher and Stutzer 2001 and the literature cited therein).

On the other hand some of the most common arguments advanced against referendums

include: (1) Lack of sophistication by voters. Voters are not able to fully understand the

complicated issues involved in a referendum, while elected politicians who specialise in

developing expert knowledge in questions of public policy are better informed and thus

better equipped to choose policy (see Kessler, 2005, for a recent formal treatment and

critical comparison). However, the latter advantage is sharply diminished if politicians

are asymmetrically informed, in the sense that they are better informed on the issues dealt

by the legislative committees where they serve, or when they may attend to the narrow

interests of their own constituencies to the exclusion of other nation-wide considerations.

In addition, recent theoretical and empirical research has shown that voters with little

political information can use information shortcuts to cast their votes the same way that

they would if they had richer information, see Lupia (1994) and Lupia and McCubbins

(1998). (2) Discontinuity of choice. A referendum which takes the form of binary choice,

yes-or-no, deprives the electorate of the opportunity to consider a richer set of possible

outcomes. (3) Inability to account for the intensity of preferences. Voting by legislative

bodies can take into account not only the direction of preferences on an issue but also

their intensity. This allows for finely balanced choices which recognise trade-offs and

make compromises on contentious questions. (4) Abuse of minorities. Referendums

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decided on a simple majority rule are less suitable for societies divided along ethnic or

religious lines where a particular community has an inbuilt majority. Constitutional

arrangements favoured by the majority community will be adopted but they will not

necessarily produce stable settlements. Then power sharing with inviolable guarantees for

the rights of minorities may turn out to be more durable, with Northern Ireland offered as

the best example of this case (see Bogdanor 1994). However, this objection is more an

argument against the use of the simple majority rule and less an argument against the use

of the referendum as a mechanism of collective choice. (5) Abuse of the majority. 17

Under conditions of asymmetric information, well informed and well endowed interest

groups hijack the referendum process, and especially that of popular initiatives, and force

governments to adopt policies that serve the objectives of the interest groups at the

expense of the majority of citizens. This risk, however, is much less pronounced in

referendums regarding constitutional issues; see Matsusaka and McCarty (2001) for a

critical assessment. (6) Deterioration of the democratic process. By removing decision

making from politicians referendums weaken their authority and consequently that of

representative government which ultimately weakens support for the democratic process.

This argument is of obvious relevance in cases where authoritarian rulers under

restrictions on freedom and rigged ballots exploit the referendum process to give the

pursuit of their objectives a semblance of democracy. On the other hand, Matsusaka

(2008) offers a subtler and previously unrecognized argument in favour of direct

democracy, as well as some suggestive evidence. Namely, by deciding some issues

directly and therefore removing them from the domain of elected officials, the

referendum enables voters to sanction politicians more effectively even on the issues that

remain under their control forcing them to improve their performance and be more

faithful agents. 18

III. Democratic principle V political expediency in the use of the referendum

17 The contradiction between arguments (4) and (5) is more apparent than real as they refer to different circumstances.

18 The above list is not exhaustive; an additional concern is how campaign contributions may affect policy outcomes in representative democracy in comparison to initiatives, see Lupia and Matsusaka (2004) and Matsusaka (2004) for details.

13

Why the issue of the monarchy in Greece was resolved by plebiscites? At least three

possible explanations spring to mind, namely, democratic principle, precedent and political

expediency.

(a) Democratic principle

It is difficult to deny the influence of democratic ideals and the benefits of direct democracy

discussed above in settling such an important constitutional question. That is, approving

important constitutional changes by direct vote rather through parliamentary majorities takes

the choice away from politicians and bestows legitimacy to the decision.19

However, democratic principle was not a sufficient condition for calling a referendum.

Various other constitutional issues were settled without direct vote but through

parliamentary votes. Specifically, none of the various constitutions enacted in 1844, 1864,

1909, 1927, 1952 and 1975 had been put to a referendum20, nor the treaty by which Greece

became a full member of the EU in 1981 (which implied ceding some sovereign powers and

whose terms of entry were negotiated by the then PM, C. Karamanlis21), nor treaties of

further European integration; they were all ratified by the parliament.

Nor was democratic principle a necessary condition. None of the six referendums about the

monarchy in Greece was in any constitutional way mandatory; they were all plebiscites held

at the discretion of the incumbent. An elected government does not necessarily behave

undemocratically if it does not call a referendum, when it is not obliged to do so. In addition,

19 However, this argument does not automatically justify the referendum as the best way to amend a constitution. For example, noting that choosing constitutional arrangements requires compromises on a multitude of issues where information and specialised expertise may be necessary, Mueller (1999) suggests that the election of a constitutional convention may be a useful alternative to amend a constitution.

20 To be precise there is an exception here, namely, in 1968 the then military regime held a referendum to ratify its proposed authoritarian constitution. The latter was approved in a rigged vote but it was never implemented.

21 Interestingly, in an unprecedented move the government at the time asked for 3/5 majority of the parliamentary vote, rather than the norm of simple majority, to ratify the Treaty. As the ruling party had a smaller majority than that, ratification relied on the support of smaller centrist parties (allowing the government to claim cross-party backing for its policy) while the socialist official opposition abstained from the vote.

14

democracy is little served by a fraudulent vote of the type described above even if one

accepts that the same outcome would have prevailed without fraud.

(b) Precedent

Obviously, precedent plays a role in the decision to call a referendum: If a particular issue

was decided by the referendum process in the past, then the same process is followed when

the same issue reappears. Politically also, it may be too costly for the incumbent to deny

holding a referendum for the same issue. On this account, after the 1920 referendum, every

time the question of the form of state was raised it seemed sensible to apply the precedent

and resolve it by a new referendum. However, there are two objections here. As already

said, the 1920 referendum concerned the person to occupy the throne, rather than the issue

of the monarchy. Moreover, if the incumbent who triggers off the process is bent on having

his way, and prepared to defraud the vote for this purpose, whether or not precedent is

followed is of no significance; it is the preferences of the incumbent that matter.

(c) Political calculation

The third explanation goes beyond democratic ideals and focuses on the use of the non

required referendum as a strategic means in the hands of the agenda setter to maximise his

own political interests. This explanation is explored at length below.

The view that holding a referendum can be used strategically by a political ruler is well

established in the literature. A number of scholars have analyzed how the incumbent can use

the referendum to his political advantage. Bogdanor (1994) maintains that an issue which

causes divisions between the politicians of the same party rather than divisions among

different parties, like a constitutional question, may not be possible to resolve through

parliamentary politics and is therefore likely to drive the leader of the governing party to call

a referendum. He argues that “Where the power to call a referendum lies in the hands of

government, it is likely to prove a tactical weapon in strengthening its powers.” (p. 31). In a

similar light, Setälä (2006) points to the use of referendum as a way to reduce “the risk of

15

electoral loss [which] emerges when the governmental party elites are committed to an

unpopular position on a salient issue, and when there are competing parties challenging this

position.” (p. 712). Hug and Sciarini (2000), argue that when the government calls a non-

mandatory referendum its supporters treat the vote as a kind of confidence vote and tend to

support its recommendation, while the incentive to support the government is weaker if the

referendum is constitutionally mandated. They write: “… a government might use a

referendum to strengthen its own position. It can do so by attempting to gloss over internal

divisions or by creating divisions in parties of the opposition.” (p. 8).

Tsebelis (2002) and Hug and Tsebelis (2002) study the implications of the referendum

process in a setting of veto players, that is, actors whose consent is required to approve a

policy and change the status quo. The possibility of calling a referendum to decide a policy

issue adds to the existing decisive political players (political parties in a coalition

government in a parliamentary system, or president and legislators in a presidential system)

the electorate, and forces the policy outcome to be closer to the preferences of the median

voter in the electorate. As a result, an agenda setter, who triggers the referendum and asks

the question to be decided by the popular vote, wields considerable policy advantages as he

“…can select whether to use the procedures of direct or representative democracy, and all

other players have to provide him with the most advantageous solution” (Tsebelis, 2002,

p.130). Hug (2004) shows that in an environment of incomplete information there will be

more non required referendums triggered off by the opposition than by the government (but

their frequency decreases with the cost of the campaign) and that policy outcomes of non

required referendums will reflect more closely the preferences of the voters. Tridimas

(2007) focuses on non required referendums called by the government when there are intra-

party splits and inter-party differences and shows how the decision of the incumbent to call

a referendum (where victory depends on winning support amongst the electorate) or a

parliamentary vote (where victory depends on winning the votes of elected representatives)

depends on the comparison of the expected payoffs in the two different contests given the

status quo.

The above explanation may offer some insights into the 1920, 1924, 1935 and 1946

16

referendums if one, rather heroically, is prepared to accept that despite the fraud, the results

accorded with the wish of the majority at the time. Yet, the 1974 referendum does not easily

fit in the same mould, as the choice of the agenda setter is not fully captured by the studies

reviewed. For example, Tsebelis (2002) and Hug and Tsebelis (2002) assume a setting of

two-dimension collective choice 22 where two different policy issues are simultaneously

decided in the same voting contest, either a vote in parliament or a referendum. Tridimas

(2007), on the other hand, assumes a single-dimension setting and studies the choice of the

incumbent to call a parliamentary vote or a referendum to decide the same policy issue.

IV. The choice of the agenda setter: parliamentary elections and constitutional

referendums

In 1974, the agenda setter, C. Karamanlis (who on Tsebelis’ typology both triggered the

process and asked the question), asked the electorate for its verdict on two separate

ballots. This implies that the relevant setting is one where two different mechanisms of

collective choice are used to decide two different issues. That is, the referendum served as

a mechanism to separate decision making on different issues. 23 This aspect of

referendums has featured prominently in recent contributions which examine how

referendums may be able to increase voter welfare by resolving principal agent

problems of representative democracy. Focusing on the opportunity that referendums

offer to unbundle issues, Besley and Coate (2008) develop a model where initiatives are a

mechanism to select those candidates for public office whose preferences will produce

the outcome congruent with the preferences of the voters. Matsusaka (2008) considers the

initiative as an incentive mechanism to force politicians to implement their promised

policies in the interest of voters. These studies focus on the voter-politician representation

relationship and the delegation problems involved. They show the gains conferred to

citizens, when initiatives allow them to cast different votes on different issues instead of 22 They carefully work out the conditions for equilibrium in this multi-dimension space

where, as we know, the existence of an equilibrium outcome is the exception rather than the rule.23 Seen from a different angle, using different voting mechanisms for different issues can be thought as an extension of the arrangement of consequential voting, where voting takes place on one issue at a time, which yields a stable voting equilibrium and offers a possible escape from the impasse of cycling in multi-dimension voting (see e.g. Mueller 2003).

17

bundling them to voting for one single candidate. The present study emphasises another

aspect, namely, how the unbundling may affect the agenda setter to combine different

methods of collective decision making in order to promote his interests. In order to draw

out the implications of the choice of the agenda setter agency problems are left aside.

Specifically, we assume that “nature” first decides who the agenda setter is; we do not

inquire how a particular actor emerged as agenda setter, as this depends on specific

circumstances and is an altogether different inquiry. The choice of the agenda setter is to

(a) call a parliamentary election which then determines a government, which, in turn,

decides public policy on economic, social, foreign etc. policy issues as well as the

constitutional issue of the form-of-state; or (b) call a parliamentary election to choose a

government with the right to decide policy on all policy issues except the constitutional

question, and to call a referendum to settle the form-of-state, republic or monarchy. In

accordance with the model of rational choice, the agenda setter is assumed to compare

the expected utility that options (a) and (b) confer to him and choose the option which

provides him with the highest utility. Since the focus of attention is the choice of election

versus election-and-referendum, rather than the policies chosen by the different

mechanisms of decision making, the model assumes that in both cases the same credible

policy platforms are offered to voters but that fighting an election on two issues involves

a different campaign from fighting an election on one issue and leaving the other issue to

the referendum. It is this difference which opens up the opportunity to the agenda setter

to choose the combination of collective decision making mechanisms which best advance

his own interests. This kind of framework is well established. For example, Rubin et al

(2001) employ it to model the decision by an interest group when to use the litigation

process and when to use lobbying of legislators for the purpose of changing the law, and

show that the model has empirical relevance. Similarly, Tridimas (2007, op. cit.) uses an

analogous framework to model the decision by an incumbent government to ratify

legislation, like an international treaty, through a parliamentary vote or a referendum. 24

24 As already indicated, the latter paper examines the choice of an incumbent government to call either a non-required referendum or a parliamentary vote to ratify one legislative bill. The decision of the incumbent relates to a single dimension choice between the proposed bill and the status quo (the opposition has no agenda setting power) and the median voter theorem applies. In the present analysis, the incumbent decides between calling an election only or an election and a

18

We consider an election game over two dimensions, first, the right to form the

government (G) and pursue one’s preferred policies, and second, the right to choose the

form-of-state (FS), monarchy or republic. There are two players in the electoral contest,

the agenda setter denoted by A and the opposition denoted by B. In general, both A and B

are assumed to be concerned with both winning the vote per se and the policy outcomes.

If A wins the election, he implements his preferred policies and his ideological objectives

are satisfied. However, if B wins the election and implements his preferred policies, A

suffers a loss in utility depending on the distance between his position and that of B. Let

GA and FA denote the preferred positions of A on the dimensions of government and form-

of-state respectively and let GB and FB denote the corresponding positions of B. The

agenda setter and the opposition propose the pairs (GA, FA) and (GB, FB) respectively and

campaign to win the election contest. Campaigning however generates disutility because

of the effort, exertion, time and resources, involved in attracting voters. We define CA and

CB to be the campaign effort made by the agenda setter and the opposition respectively in

an election for deciding the government and the form of state. Further, we assume that WA

and WB are respectively the costs per unit of effort in the electoral campaign of the

agenda setter and the opposition. Such costs arise from the disutility of debating and

campaigning to convince voters to vote for the proposed platform and the relevant

campaign expenses.

Let the probability that the agenda setter wins the election to decide both the government

and the form-of-state be P; the probability that the opposition wins is then 1P. In

accordance with Tullock (1980), it is assumed that P depends on the simultaneous choice of

campaign effort by A and B, P=P(CA, CB).

We assume that the objective functions of the agenda setter and the opposition are additively

separable in the attributes of policy preferences and winning office and that utility from the

policy outcome is quadratic. The expected pay-off of the agenda setter may then be written

referendum to ratify two different issues of public policy, the constitutional arrangement and the post-constitutional policy, where all players contesting the elections make policy proposals.

19

as follows

UA = (1)

The first component, (1–A)AP, captures the expected utility from winning the vote.

Coefficient (1–A) shows the marginal utility from winning the vote and A is a scale

factor which represents the value placed on winning the vote and assuming office. The A

coefficient shows the relative weight that the agenda setter obtains by implementing his

preferred policies; the A and 1A coefficients represent the weights attached to the issues

of government and form-of-state in the preferences of the agenda setter. The term (1–P)

[A(GA–GB)2+1A)(FA–FB)2] shows A’s expected loss if he loses the election and the

opposition implements his preferred platform. 25 The term, CAWA, is the total cost of

election campaigning. Denoting A1E (1A)A+A[GA–GB)2 + (1–FA–F-

B)2] > 0 and A2E A[GA–GB)2+(1A)(FA–FB)2] > 0, the agenda setter’s

marginal benefit of an expected vote, and the disutility suffered when the opposition

implements its preferences on the two issues of government and form-of-state, equation

(1) is rewritten as

UAE = (1')

Similarly, the expected utility function of the opposition is written as

UB= (2)

Or upon denoting B1E (1B)BB[GB–GA)2 +(1–FB–FA)2] > 0, the

marginal disutility of a vote lost, and B2E (1–B)B > 0, the utility from winning office,

the utility of the opposition from winning office, in more compact form

UB = (2')

25 A’s disutility from implementing his ideological objectives is zero, that is, AP[A(GA–GA)2+(1A)(FA–FA)2]=0.

20

Let Q denote the probability that the agenda setter wins an election that he calls to decide

government policy only, while the form-of-state is decided by a referendum. Again this

probability is assumed to depend on the campaign efforts by A and B to fight the election,

denoted respectively by HA and HB, Q=Q(HA, HB); the corresponding costs per unit of

effort are TA and TB. However, as it was the case in the 1974 referendum, neither the

agenda setter nor the opposition campaign for their favoured outcomes on the issue of the

form-of-state. The exogenous probability that the referendum results in the outcome most

preferred by the agenda setter is assumed to be , 0 1. Correspondingly, the

probability that the referendum outcome is the one most preferred by the opposition is

The objective functions of A and B respectively are written as follows:

VA = (1A)AQ – A[QGA–GB)2 + (1–(1)(FA–FB)2] – TAHA

(3)

VB = (1B)BQB[B QGB–GA)2 + (1B) (FB–FA)2 ] – TBHB

(4)

Or more compactly, upon denoting A1R (1A)A+AGA–GB)2 > 0; A2R

A[GA–GB)2 +(1)(1A)(FA–FB)2] > 0; B1R (1B)BBGB–GA)2 > 0

and B2R (1B)BB(1B) (FB–FA)2 > 0

VA = A1R – A2R – TAHA (3')

VB = – B1RQ + B2R – TBHB (4')

Analogously to the previous case, A1R and A2R are the agenda setter’s marginal utility of

an expected vote and expected disutility from failing to implement his policy preferences.

It is also immediately observed that A1R < A1E, A2R < A2E, B1R < B1E and B2R < B2E, that is,

for both A and B benefits and losses are larger in the election which bundles the issues of

government and form-of-state.

21

Assuming that unique Nash equilibrium solutions to the election and election-plus-

referendum games exist, and that they are given by the values of the campaign effort

chosen by the agenda setter and the opposition, the agenda setter chooses the game which

generates the highest expected net payoff. 26 Thus, the agenda setter will call an election

to determine the government and a referendum to resolve the constitutional issue when

VA>UA.

In order to obtain informative and tractable results, the probabilities of winning the

election contest are assumed to take the “Tullock formula” and are written as

P=CA

C A+CB(5)

Q=H A

H A+H B(6)

Parameter “” measures the effectiveness of the campaign effort of the agenda setter

against that of the opposition. If > (=, <) 1 the agenda setter is a more (equal, less)

effective campaigner than the leader of the opposition and other things equal attracts

more (equal, fewer) votes to his cause. It is included to acknowledge that voters may

evaluate the personal characteristics of the agenda setter differently from those of the

leader of the opposition and can be interpreted as the relative electoral attractiveness of

the agenda setter.

The Nash equilibrium of the election for both government and head of state is obtained

by maximising (1) with respect to CA taking CB as given and the other way around for (2),

which yields the following equilibrium values for effort, probability of winning the

election and expected payoff

(7)

26 If the incumbent chooses to call an election for G and FS, a Nash equilibrium of the election sub-game (CA*, CB*) requires that for all CA, VA(CA*, CB*) VA(CA, CB*) and for all CB, VA(CA*, CB*) VA(CA*, CB).

22

Working in a similar manner, the equilibrium values for effort, probability of winning the

election and expected payoff when the agenda setter calls an election to decide the

government are

(8)

Taking the difference between the expected payoffs in (8) and (7), VA*UA*, we find

(9)

The agenda setter calls an election to decide the government and a referendum to decide

the form-of-state when > 0. However, expression (9) is too complex to be signed

unambiguously at this level of generality. We then proceed to identify the conditions for

to carry a positive sign.

It is first observed that the exogenous part of the expected payoff is higher under the

election-plus-referendum arrangement, namely

A2E A2R = (10)

The above implies that, as intuition suggests, the higher the probability that the

referendum will produce the result favoured by the agenda setter, the more likely that he

will call a referendum, since this minimises his campaign effort.

Turning to , the part of which depends on the probabilities of

electoral victories, we haveafter the relevant substitutions 27

> 0 when W A/ A1 E

W B /B1 E > [T A/ A1 R

T B /B1 R √ A1E

A1R+(√ A1 E

A1 R−1)] (11)

The inequality in (11) is interpreted as follows: The ratio represents the agenda

setter’s marginal cost in comparison to the marginal utility of an expected vote in the

27 =A1 R P2Q❑2

¿

23

election campaign for government and form-of-state. The ratio is its analogue for

the opposition. Thus, the quantity represents the agenda setter’s relative

marginal campaign cost compared to the campaign cost of the opposition in an election

for both government and form-of-state. By the same token, the quantity represents

the agenda setter’s marginal campaign cost relative to the opposition in an election for

government only. The ratio > 1, which in turn implies , shows the

agenda setter’s marginal benefit from winning an election to decide both the government

and the form of state relative to the marginal benefit from winning an election to decide

the government only. The term then captures the agenda setter’s

marginal benefit of an election for government and form-of-state weighted by the relative

cost, while the term (√A1 E/A1 R−1)αdepicts the net value of the agenda setter’s campaign

advantage in an election for government and form-of state. The sum in the right-hand-

side of (11) is then the sum of the agenda setter’s net marginal benefit in an election for

government and form-of-state. It follows that the agenda setter calls an election for

government only and a referendum for settling the issue of monarchy when his relative

marginal cost of an election for both government and form-of-state exceeds the

corresponding net marginal benefit. Since , a sufficient condition for calling

a referendum is , that is, the agenda setter’s relative marginal campaign

cost compared to the campaign cost of the opposition in an election for both government

and form-of-state to exceed the agenda setter’s marginal campaign cost relative to the

opposition in an election for government only.

Taken together, (10) and (11) imply that in choosing between an election which bundles

the two issues or an election and a referendum which separates them, the agenda setter

considers four sets of factors: (a) the costs of campaign efforts relative to the opposition,

24

(b) the benefits to be gained from winning the different contests relative to the

opposition, (c) his comparative electoral appeal as a campaigner against the opposition

and (d) the probability that the referendum secures his favourite outcome. However, at

this level of generality, given the complexity of the factors which affect the ratios in the

two sides of inequality (11) the only unambiguous, if rather obvious, result is that the

higher the exogenous probability that the referendum secures the outcome favoured by

the agenda setter, the more likely that he will call a referendum to decide the

constitutional question.

We therefore proceed by looking at some special cases. Specifically, let us assume that

the parameters in the utility functions of the agenda setter and the opposition are

identical, that is, A = B = , A = B = and A = B = . The latter imply A1E = B1E = (1–

)+[(GA–GB)2+(1–(FA–FB)2]; A1R = B1R = (1–)+(GA–GB)2; A2E = (GA–

GB)2+(1–(FA–FB)2] and A2R = (GA–GB)2+(1–)(1–(FA–FB)2], so that inequalities

(10) and (11) then simplify to

1 = (1– )(FA– FB)2 > 0 (12)

2 > 0 when (13)

The corresponding sufficiency condition for calling a referendum is then ,

or equivalently WA/TA>WB/TB. That is, the agenda setter’s marginal cost of election for G

and FS relative to that for G only exceeds that of the opposition’s. Based on the

comparative static properties of (12) and (13) –see the Appendix– we conclude that the

likelihood that the agenda setter calls an election and a referendum increases (a) the

higher the (exogenous) probability that the referendum returns the agenda setter’s

favoured outcome ; (b) the higher the difference in the policy preferences between the

agenda setter and the opposition on the issue of government policy, (GAGB)2; (c) the

higher (smaller) the agenda setter’s (opposition’s) cost of electoral campaign on an

election for both government and form-of-state, WA (WB); (d) the smaller the agenda

setter’s (opposition’s) cost of electoral campaign for government only TA (TB); (e) the

higher (lower) the marginal utility of office, , as Q>(<)P; while it is ambiguous in (f) the

size of weight of policy preferences, ; (g) the relative importance of form-of-state issue

in preferences, ; (h) the size of his comparative electoral appeal as a campaigner against

25

the opposition, ; and (i) the difference in the policy preferences between the agenda

setter and the opposition on the issue of the form-of-state, (FAFB)2.

Finally, it bears noting that if the two election contenders are opportunistic, that is, they

do not have policy preferences and are only interested in winning office, then

A=B=A=B =0 which implies that A1E=A1R=A, A2E=A2R=0 and B1E=B2E=B2R=B, B1R=0

equation (9) reduces to

> 0 when (14)

The latter is identical to the sufficiency condition of (13). Note, that in this case the

exogenous probability that the referendum secures the agenda setter’s preferred outcome

is no longer relevant. All that matters is whether his cost of an election for government

and form-of-state relative to an election for government only exceeds that of the

opposition.

There are good reasons to believe that the condition was satisfied in the

setting of 1974. It may be recalled that at the time Karamanlis was leading a right-of-

centre coalition which was contesting the first parliamentary election in ten years after a

seven year interval of a nationalist-rightwing military dictatorship. In addition, the

constitutional position of the monarchy had to be settled under two caveats. First, for

more than fifty years the monarchy had been a divisive issue; second, given the history of

previous parliamentary and referendum manoeuvrings, claims made by leftwing circles

that a rightwing government might be biased in favour of the crown, could be given some

credence. In those circumstances, if, irrespective of his own preferences, Karamanlis

declared that he supported the monarchy he risked alienating non-monarchist voters who

would be inclined to vote for his party; if he declared that he supported the republic, he

risked alienating rightwing monarchists. 28 However, not declaring his support for either

monarchy or republic was not sensible in an election to decide both the government and

the form-of-state. Thus, if he declared one way or the other, he would have to campaign

28 Note that the absence of specific right-wing monarchist and non-monarchists parties was indicative of the barriers to entry in the political market.

26

not only to attract voters on the government (left right) dimension but also to prevent

the loss of voters on the form-of-state (monarchy republic) dimension. This suggests

that as a rightwing politician his cost of campaign to fight an election for both

government and head of state was higher than that of an election for government only. On

the contrary, by calling a referendum to decide the constitutional question he un-bundled

the issues; the electoral campaign for government could be more focused and the

message to the voters was more cohesive. Moreover, by separating the decision of

government from the constitution, he diminished the ability of the leftwing opposition to

use the call for a republic as an argument to ask voters to vote for it (and at the time it had

few other issues in common), something which might render its electoral message less

coherent.

V. Conclusions

There seems to be a wide consensus in the political economy literature that holding a

referendum to decide an issue of public interest confers important benefits to the citizenry

by involving the voters directly in the process of determining the outcome of collective

choice. This volume of work typically considers the referendum as an alternative to

decision making by elected representatives and focuses on the referendum as a possible

mechanism to resolve the potentially serious problems of delegation which may trouble

decision making by political representatives as agents of voters. The present paper has

followed a second line of inquiry, complementary to the former, which explores how the

referendum can be used by an agenda setter to gain a strategic advantage to pursue his

objectives.

The analysis used a spatial decision model where winning the various electorate contests

depends on the efforts expended by the competing politicians. Winning an election

which bundles two issues may imply different costs from winning an election to decide

one issue and calling a referendum to settle the second issue, as the two methods of

choice require different campaign efforts to attract votes. Given his interests, the agenda

27

setter chooses the combination of election and referendum which maximises his expected

net payoff.

The motivation of the paper has been the experience of Greece and especially her drawn-out

record of constitutional change from monarchy to republic. After a long period of often

violent and painful swings from the one to the other, the issue was resolved by the1974

referendum in favour of the republic. The paper did not attempt to explain why voters voted

for the republic and against the monarchy. Neither was it interested in the question of how

the agenda setter emerged in the crisis of 1974, nor did it address normative questions like

whether the referendum is the suitable method to decide the form of the state. These

important questions are left for future work. But with the dust of the emotive controversy

about the monarchy settled, the paper explained how the agenda setter separated one

constitutional question from other issues of public interest and used the referendum

mechanism to address only that constitutional issue. To recap, six referendums on the form

of the state took place in 1920, 1924, 1935, 1946, 1973 and 1974. By hook or by crook, in

all cases the referendum result went the way the incumbent who triggered the referendum

had wished for. The 1974 referendum however was different from its earlier counterparts in

two important respects. First, it was the only one that passed the test of free and fair election;

second it was not held to endorse a resolution previously passed by the incumbent

government. Instead and in contrast to all previous plebiscites, the agenda setter in 1974

chose to call a referendum as the sole mechanism for resolving the question of monarchy or

republic, and parliamentary elections for determining all other constitutional arrangements

as well as post-constitutional policy issues. In accordance with the predictions of the model,

C. Karamanlis, the agenda setter at the time being no friend of the monarchy but relying on

a right-wing coalition which included significant support from pro-royalist circles to win

office, split the issue of the monarchy from all other issues by calling a parliamentary

election, where he stood as a candidate for the office of prime minister, and a referendum to

settle the constitutional question. This allowed his electorate campaign to focus on the issue

of electing a government to decide policy, where Karamanlis’ appeal was considerable, and

minimise the possible loss of the votes, which would have resulted from the vulnerability of

his rightwing coalition on the issue of monarchy. He won the parliamentary election with a

28

substantial majority in the popular vote, while the referendum returned an overwhelming

support for the republic.

Appendix: Derivation of the comparative static properties when A=B =, A=B= and A=B= – inequalities (12) and (13).

= A2E – A2R +A1RQ2 – A1EP2, where

A1E = B1E = (1–)+[(GA–GB)2+(1–(FA–FB)2]; A1R = B1R = (1–)+(GA–GB)2;

A2E = (GA–GB)2+(1–(FA–FB)2]; A2R = (GA–GB)2+(1–)(1–(FA–FB)2;

P =WB÷ (WB+WA) and Q=TB÷ (TB+TA) ¿¿

¿

Sign dd (1–)(FA–FB)2 > 0

Sign dd (GA−GB)

2 = Q2 > 0

Sign ddW A

= 2WB{(1–)+[(GA–GB)2+(1–(FA–FB)2]}P > 0

Sign ddW B

= –2WA{(1–)+[(GA–GB)2+(1–(FA–FB)2]}P < 0

Sign ddT A

= –2TB[(1–)+(GA–GB)2]Q < 0

Sign ddT B

= 2TA[(1–)+(GA–GB)2]Q > 0

Sign dd = (1 –)(Q2 –P2) >(<) 0 as Q >(<) P

Sign dd = (1–)(FA–FB)2+[+(GA–GB)2]Q2–[+(GA–GB)2+(1–)(FA–FB)2]P2 = ?

Sign dd = –(FA–FB)2+(GA–GB)2Q2 – {[(GA–GB)2–(FA–FB)2]}P2 = ?

Sign dd = 2{ (GA–GB}QTATB(TB+TA)2–

29

(GA–GB (1–)(FA–FB)2]}PWAWB(WB+WA)2 = ?

Sign dd (FA−FB)

2 = (1–)(–P2) = ?

Acknowledgement: I wish to thank two anonymous referees for helpful advice, comments and suggestions on an earlier version of the paper and participants in the 2009 European Public Choice Society Conference in Athens. Of course, responsibility for any remaining errors or omissions is mine alone.

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