Governance is about action, not decision-making
July 13th, 2022

The common misconception that governance is primarily about decision-making is wrong, outdated, and dangerous.

The goal of governance is to DO things. Governance is about taking ACTION.

Decision-making is important, but it is just one aspect of taking action.

“Governance = decision-making” is wrong

Governance is a specific category of coordination. All governance is coordination, but not all coordination is governance. Coordination enables a network of agents to work together to bring about change within some domain of the world.

When a network of agents has shared resources it can use to help bring about that change, it engages in governance to take actions using those resources. 

As a comparison, when a network of agents does not have shared resources, it engages in non-governance coordination to guide the separation actions of individual agents

The Anticapture framework models actions as cycles of four phases: evaluate, propose, decide, execute. 

In non-governance coordination, the network of agents together may engage in the first three phases. The decide phase generates signals that the individual agents use to guide execution of their own actions.

But in governance, the network of agents engages in all four action phases. The decide phase selects the action, which the network then executes.

To exclude the execution phase of actions from governance is to misunderstand what governance is.

“Governance = decision-making” is outdated

The mischaracterization of governance as decision-making is an artifact of the legacy world. It is a reflection of the incompleteness of the governance systems we’ve been limited to creating in the past.

Until very recently, it was literally impossible for agents in a network to collectively execute an action using the network’s shared resources. Instead, many legacy governance systems rely on trusting individual people to execute actions on behalf of the many. “Governance” came to refer to the process for deciding which action to trust a single agent to execute.

This 1 of 6 security model illustrates the limitations of pre-smart contract governance systems. Source:
This 1 of 6 security model illustrates the limitations of pre-smart contract governance systems. Source:

But we no longer live in that world. Thanks to blockchains and smart contracts, for the first time in human history we have the ability to distribute executive power across multiple agents. 

We can do this at smaller scales (up to ~15 agents) with multisig wallets like Safe. We can do it at medium scales (up to ~150 agents) with frameworks like the Moloch DAO v2 smart contracts, and we can even do it at large scales (thousands – perhaps millions? – of agents) with frameworks like the Governor smart contracts.

We are just starting to explore these new tools, but already we can create governance systems that actually cover the full breadth of governance. It’s time to update our understanding accordingly.

“Governance = decision-making” is dangerous

Limiting your conception of governance to just one part of the whole is a great way to design bad governance systems. 

If you ignore the actual goal of governance – taking action – you're liable to create a system that is exposed to capture, just like our broken governance systems in place throughout society today. 

The power to execute actions is where true hard power lies. Executive power can trivially override decision-making power. A capture-resistant governance system must distribute executive power as well as decision-making power. But a governance system that does not acknowledge the importance of the execute phase of actions will never be able to do this.

Time to DAO

Our new ability to design governance systems that actually cover the full breadth of governance is a profoundly important shift. We may look back on it as one of the most important advances in human history.

Let's use these new tools to their full potential. Let's build real DAOs.

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