How Can Minority Interests Be Protected?
Hans Peter Grüner is a professor of economics specializing in economic policy at the University of Mannheim. In this interview, he explains how economics can contribute to strengthening democracy.
FORUM: When people think of research on democracy, economics probably isn’t the first discipline that comes to mind. Where do the two fields connect?
Prof. Dr. Hans Peter Grüner: Markets and democracy have two things in common. First, both are systems designed to resolve conflicts peacefully. Second, they both face a similar challenge: the relevant information needed to make decisions is often not publicly available but scattered and hidden. In markets, this includes things like consumers’ preferences or information about technologies available to firms—things no one person or authority fully knows. The problem is similar in democracies. The challenge is to take people’s diverse and often conflicting preferences and turn them into collective decisions. As economists, we are familiar with institutions designed to process dispersed and hidden information—because we’re used to analyzing markets. The same analytical tools we use there can help us better understand democracies and its various institutional forms.
FORUM: What kinds of questions have you explored in this area?
Grüner: One big question is how to protect minority interests in a democracy. Simple majority rule often doesn’t account for the legitimate interests of minority groups. And we shouldn’t just think of minorities living today—we also need to consider those who don’t yet have voting rights or who may hold different preferences in the future.
FORUM: When it comes to climate policy, for example?
Grüner: Yes—or in the case of public debt. In both areas, we’re dealing with long-term decisions that affect future generations or future majorities. In other domains, like freedom of speech, the question is: how can we ensure that important concerns voiced by today’s minorities aren’t ignored, thereby avoiding a tyranny of the majority? These are often questions of gains and losses—and of how to design the “right” kind of majority rule. But it’s not just democracies that make it difficult for some groups to be heard—the same dynamic can occur in markets. Together with Alexandra Niessen-Ruenzi from Mannheim and Christoph Siemroth from the University of Essex, I looked at how the dominance of male fund managers in the investment industry might influence decisions in the stock market. In our dataset, about 90 percent of the funds are managed by men, who oversee roughly 97 percent of the total investment volume. The question is: would outcomes look different if more women were managing these funds? What we found is that a fund’s investments are statistically correlated with the consumption patterns associated with the manager’s gender. That suggests that the investment patterns across the broader economy might shift if more women were managing funds.
FORUM: So it’s about who gets to shape decisions and how?
Grüner: Exactly. That’s the starting point for evaluating today’s institutions. But what I’m really interested in is institutional innovation—in both democracy and the market economy. The guiding question is: can we improve the rules, based on clearly defined criteria? Our goal is to identify feasible improvements. In the case of democracy, where minority interests are at stake, it may make sense to adopt qualified majority rules—so that particularly sensitive decisions require more than a simple majority, for example a two-thirds majority.
FORUM: Have you studied that empirically?
Grüner: Yes. Along with several colleagues, I conducted experimental studies to see whether people are even capable of selecting appropriate majority rules when the gains and losses from a decision vary in magnitude. Can people choose a rule that would also be fair for someone who doesn’t yet know whether they’ll be on the winning or losing side? When the potential losses are greater, stricter majority rules are preferable. What we found is that many participants chose poorly—something that would be problematic in real-world settings. Qualified majority rules can also be useful for keeping public debt in check, without unduly limiting government flexibility in times of crisis. In another study, I looked at what happens when parliaments impose higher vote thresholds for approving debt increases. In some cases, this ensures that budget expansions serve broader interests—not just the demands of narrow interest groups.
FORUM: You have years of experience and regularly publish op-eds in Handelsblatt and the FAZ. You’ve advised the European Commission, the European Central Bank, and private companies. Do you feel that your work—and that of your peers—is being heard by policymakers? Do you feel you have an impact?
Grüner: When I’m doing purely theoretical work, it’s rare for anyone to reach out with a specific practical question. But our empirical study on the fund industry did receive significant media coverage. The paper is still relatively new—we’ll see whether financial regulators take an interest. Occasionally there’s informal exchange with members of parliament. And sometimes you’re lucky enough to see a direct impact. I once attended a meeting at a company where a concrete decision was made during that very session based on our recommendations. That was a great moment. In politics, that kind of thing is much rarer. But I was involved in the constitutional review case against the second supplementary federal budget of 2021, which was ultimately successful. I believed there were strong economic arguments that what the federal government had done was unconstitutional. After speaking with several members of the CDU/
Interview: Katja Bauer / August 2025