In a democracy, some people say that politicians represent the will of the people. While many people see politicians as slimy, they think that voters can keep them in line through periodic elections. After all, if a politician acts badly, we can “vote the bastards out!”
However, real-world voters face a set of constraints that limit the effectiveness of electoral feedback. Public choice theorists have documented these constraints extensively, but today I want to discuss just three such constraints. Let’s call them the ABCs of Electoral Politics.
A is for Asymmetric information
Ideal theories of democratic politics suggest that voters use their vote to hold government officials accountable. If politicians misbehave, voters can vote against them. If bureaucrats misbehave, then politicians hold those bureaucrats accountable, or risk being voted out by voters.
But if voters are going to hold officials accountable for misconduct, they first need to know about the misconduct. That poses a challenge because real-world democracies are characterized by asymmetric information.
Consider the relationship between a voter and a politician. The politician will know more about what’s happening in government than the voter. This information asymmetry creates an opportunity for the politician to act opportunistically, perhaps by implementing policies that benefit special interests at the expense of voters. This is an example of a principal-agent problem. The politician is meant to act on behalf of the voter, as the voter’s agent. But due to information asymmetries, there is room for the politician to act against the voter’s interests.
In real-world governments, there are multiple layers of principal-agent problems. In addition to the relationship between voters and politicians, there is also the relationship between politicians and bureaucrats. Just as politicians are supposed to act on behalf of voters but may instead act opportunistically, bureaucrats are supposed to act on behalf of politicians but may instead act opportunistically. Bureaucrats have specialized knowledge about their bureaus that politicians lack, which creates information asymmetries. This creates space for opportunism by bureaucrats.
These problems of opportunism and asymmetric information become more severe when bureaucrats have monopoly control over the release of information about their activities. This problem is most acute in the national security state, where officials can easily classify information, thereby rendering it illegal to share that information with the public and sometimes even with politicians. Abigail R. Hall and Christopher J. Coyne discuss this problem at length in their book Manufacturing Militarism: U.S. Government Propaganda in the War on Terror, which I previously reviewed for EconLib. Hall, Coyne, and I also discussed the role whistleblowers can play in alleviating these problems in our paper Sounding the Alarm: The Political Economy of Whistleblowing in the U.S. Security State.
While these issues are most severe when politicians and bureaucrats can act secretly, asymmetric information limits the value of voter feedback across all policy arenas. It turns out that what you don’t know can hurt you.
B is for Bundling
Even when voters do know about a political action they find unacceptable or upsetting, their ability to offer feedback by voting is still limited. One reason for this is that in most elections issues are bundled. When you vote for a presidential, congressional, gubernatorial, or mayoral candidate, you are not voting in a referendum on any specific policy issue. Instead, you are voting to elect a politician, who will then have increased power to act on all their policy preferences. There is no way to signal that you are voting for a particular candidate based on their foreign policy views but disagree with their views on financial regulation.
This poses problems, because a voter might know about some action or policy by an incumbent politician that they strongly condemn. However, while they strongly oppose the politician on that issue, they may disagree with the politician’s opponent even more strongly on another issue. They may therefore feel that they cannot in good conscience vote against the incumbent, even though they would like to offer negative feedback.
Politicians use their power to influence a wide variety of issues, including foreign policy, fiscal policy, environmental regulation, parks and recreation, public health, and many more. The list is potentially endless. Given the diversity of issues that politicians influence, a voter who cares about policy must vote based on a complex bundle of positions rather than offering neat, legible feedback regarding any specific issue. This means that electoral feedback is a rather noisy signal.
C is for Counterfactuals
Voters face an additional difficulty. They can never directly observe what might have happened had an election gone the other way. For example, pro-peace voter might be disappointed by a candidate’s foreign policy, but still credibly wonder whether the other candidate may have been even more aggressive abroad. Or a voter may be disappointed in economic activity during a given politician’s presidency but have no way to discern how much of that can be credibly attributed to the president. As David Friedman explains in The Machinery of Freedom:
In other words, voters have no way to compare a politician they have observed with a plausible counterfactual situation involving other candidates.
This substantially limits a voter’s ability to offer informed feedback through voting.
These are just a few of the public choice problems that limit voter feedback. To understand these types of issues more fully, you should read more about public choice theory. But knowing the ABCs of electoral politics is a good start for understanding real world democracies.
Nathan P. Goodman is a Postdoctoral Fellow in the Department of Economics at New York University. His research interests include defense and peace economics, self-governance, public choice, institutional analysis, and Austrian economics.
READER COMMENTS
Jon Murphy
May 3 2022 at 5:02pm
Good stuff Nathan (as always). If I could add one thing to your list and keeping with your theme:
D is for Deference. Even if the principal observes bad behavior of the agent, there may be excessive deference on the part of the principal. In other words, the principal may look and say “my agent does not seem to be operating in my best interest. However, they may know better than I do, so I should not question, object, or in any other way challenge them.” They defer to the experts even if the experts appear to not be working in their interest.
In a way, this is related to the asymmetric information problem, except in my example, the principal assumes asymmetric information but does nothing to correct the supposed problem.
Nathan Goodman
May 3 2022 at 6:51pm
Thanks, Jon!
I like the addition of Deference there. I think that is an all too common phenomenon in real-world politics, and it intersects in a really interesting way with both public choice and the literature around expert failure.
I haven’t thought about that as much as I should, so I appreciate you bringing it up!
Mark Brophy
May 5 2022 at 6:16pm
Voters deferred to government experts on masks, social distancing, and Covid vaccines but the “experts” were poseurs. The costs of the government response to the virus would’ve been much smaller if the electorate had been skeptical.
Comments are closed.