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Why Voting Doesn't Work

Presentation to the Australian Libertarian Society, Sydney, April 2013.

Eric Crampton

on 8 April 2013

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Transcript of Why Voting Doesn't Work

Why Voting Doesn't Work
(or, worse, why it sometimes does) Public Choice ...and when voters aren't watching... Rational Ignorance Revisited:
...it gets worse. Summing up Economists talk a lot about market failures.
But politics is hardly failure-free! Implications The optimal size and scope of government is smaller that you might have thought;
Representative democracy vs direct democracy
Political accountability through retrospective voting Rational ignorance If information is costly, some ignorance is optimal.

But what benefit does a voter get from political information? Social choice and
democratic outcomes
Markets turn preferences into outcomes via individual choice and the price system. Traditional public choice problems:
Don Wittman's challenge: unbiased ignorance?
Public choice shows political markets are rather flawed
Policy may be broadly consistent with voter preferences, but there are systematic problems with voter preferences Dr. Eric Crampton
Department of Economics & Finance, University of Canterbury
Australian Libertarian Conference, April 2013 Traditional public choice asks what happens if politicians are rational and self-interested;
More recent work wonders what happens when voters are systematically wrong. Moving from individual to reasonable collective choices outside of markets is harder. Implications: Election and policy outcomes are highly subject to the voting method chosen;
The power to set the voting order can be the power to decide the outcome.
The cruel calculus of the Veil of Insignificance If every other voter flips a fair coin, and there are 2 million voters, you have a 1/5000 chance of breaking a tie;
10 of 56613 American elections have had a "pivotal voter";
In the 2008 U.S. Federal Election, the average Presidential voter had a 1/60,000,000 chance of changing the outcome.
The marginal instrumental benefit of political information is effectively zero. Olson's Logic of Collective Action
Rent-seeking and Transitional Gains Traps
Every principal-agent problem economists worry about, a fortiori. But but but...! Parties subsidise information
Marginal benefit still zero
Marginal cost is time and effort People are altruistic
Altruism has better outlets! What about civic duty? Duty to vote, or to vote well?
Look at the data! The Budget Somin's summary 57% had never heard of Newt Gingrich one month after Gingrich's GOP captured Congress. Two years after the Cuban Missile Crisis, only 38% of Americans knew the Soviets not part of NATO. Mid-1980s, 43% knew of SDI; 22% knew US policy was to nuke USSR if they invaded Western Europe. Bare majorities know which Party controls the Senate Massive overestimates of the budget-share of small programmes. Relative size of Defense compared to Medicare is correct, but food stamps, foreign aid, federal education spending all massively overestimated. PBS spending is 0.1% of Medicare spending; the public estimate it at 25% of Medicare spending! Programme Est Proportion Actual Proportion
Medicare (elderly) 20% 12.8%
Medicaid (poor) 15% 8.2%
Social Security 20% 19.6%
DoD Defence 30% 18.7%
Foreign Aid 10% 0.8%
Food stamps 10% 2.8%
Public Broadcasting 5% 0.1% Of those supporting FPP:
21% said we have the right number of parties or too few
27% said they prefer coalition govts
39% said a party getting 40% of the vote should get about 40% of the seats

Of those supporting MMP
56% said getting 40% of vote should get 40% of seats; 27% said more than 40%
37% said we have too many parties
8% said they prefer single-party govt
[NZES 2008] Electoral Law referendum The party vote is more important under MMP. BUT:
Only 46% get it right
Of those saying MMP is easy or very easy, only 47.5% get it right and more get it strictly wrong.
25% understood the dual threshold; those saying MMP is easy were more likely to get it wrong. Colmar-Brunton 2008 On questions of positive economics, U.S. voters:
Are pessimistic
Prefer make-work policies
Do not trust markets
Do not trust foreigners (Caplan 2001) 2008 NZES median respondant:
Neutral on wage and price controls
Supports import controls
Is neutral on globalization
Supports free trade
Supports tax cuts
Says govt should be responsible for job creation Caplan's answer: rational irrationality
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