The idea of algo gov is interesting, but connection to Markov chains is not clear.
The Markov chains are just a simple model to describe the life cycles of government regimes. We as a society want to stay in the low number states as much as possible.
Love this concept -- how do you handle the idea of the tyranny of the majority in this model?
Tyranny of the majority is handled by simply moving to a different government, creating a new one, being a part of several that serve your interests, or not being a citizen of any.