Partisan Bias Diminishes When Partisans Pay

by on June 4, 2013 at 7:32 am in Economics, Political Science | Permalink

In November of last year I wrote:

Overall, I am for betting because I am against bullshit. Bullshit is polluting our discourse and drowning the facts. A bet costs the bullshitter more than the non-bullshitter so the willingness to bet signals honest belief. A bet is a tax on bullshit; and it is a just tax, tribute paid by the bullshitters to those with genuine knowledge.

A recent paper provides evidence. It’s well known that Democrats and Republicans give different answers to even basic factual questions when those questions are politically loaded (Did inflation fall under Reagan? Were WMDs found in Iraq? and so forth). But do the respondents really believe their answers or are they simply signalling their affiliations? In other words, are respondents bullshitting? In a new paper, Bullock, Gerber, Huber and Hill provide evidence that the respondents don’t actually believe what they say and the authors do so by making partisans pay for their beliefs. Dylan Matthews at Wonkblog has a good writeup:

They ran two experiments. In the first, they split respondents into two groups: Those in the control group were asked basic factual questions about politics; those in the treatment group were asked the same questions but were entered into a raffle for an Amazon gift card wherein their chances depended on how many questions they got right.

In the control group, the authors find what Bartels, Nyhan and Reifler found: There are big partisan gaps in the accuracy of responses.

…But when there was money on the line, the size of the gaps shrank by 55 percent. The researchers ran another experiment, in which they increased the odds of winning for those who answered the questions correctly but also offered a smaller reward to those who answered “don’t know” rather than answering falsely. The partisan gaps narrowed by 80 percent.

The paper also has implications for democracy. Voting is just another survey without individual consequence so voting encourages expressions of rational irrationality and it’s no surprise why democracies choose bad policies.

Hat tip: @jneeley78.

Bill June 4, 2013 at 7:51 am

You can look at it a different way as well.

If respondents bet more truthfully if money is on the line, how will they bet if they are given a reward for betting dishonestly:

Might this explain why some believe that tax cuts pay for themselves, knowing full well that the cuts would lead to deficits, but also knowing they would be the beneficiaries.?

RPLong June 4, 2013 at 7:56 am

How might you design an experiment that rewards people for lying, Bill?

Anyway, we all know it’s only the OTHER GUYS who have a problem. OUR GUYS probably responded the same way in both groups, but the OTHER GUYS are dishonest, and their responses are the reason there was divergence between the two groups.

;)

dan1111 June 4, 2013 at 8:11 am

+1

Bill June 4, 2013 at 8:55 am

RP, The will to believe is consistent with one’s interest, isn’t it. So, how about structuring a game that if the bet is wrong, knowing that it will be wrong, persons who propose the bet suffer the consequences later, such as a tax increase. But, when you do that, what happens: deadlock at a later period and periodic planned financial crises occuring every fiscal year. So, what this tells me is that one is rewarded for lying, not punished for it.

As to the “OTHER GUYS” argument you made, I did not make it: I was simply pointing out that one can propose something that benefits oneself and harms others later, all under the guise of expanding total revenues.

Ever heard of starve the beast?

dan1111 June 4, 2013 at 9:05 am

I read the “OTHER GUYS” statement as an amusing commentary on partisanship in general, not directed at any specific person.

RPLong June 4, 2013 at 9:15 am

Bill, regarding my first comment, I was making the point that the study only tested for rewarding truth. If you want to talk about punishing falsehood, that will require a separate study. It’s out of scope here. Might make for an interesting future experiment, though, if you can figure out a way to actually test it, rather than describe how the system seems to conform to it.

Regarding my second comment, we can say as much about “starve the beast” as we can about “bend the cost curve” of any other such nonsense. That’s the whole point. The system is not the issue. The system will not suddenly turn us all into angels. The whole problem is that people are willing to lie about the facts if they think the lie is valuable. It takes a monetary counter-offer to evoke truth. If that’s not corruption, I don’t know what is. What’s important here is that these weren’t politicians, they were “normal” people.

Bill June 4, 2013 at 9:58 am

OK, I understand your point and see the difference. Thanks.

Frederic Mari June 4, 2013 at 9:29 am

Hmmm….

You know, one thing I like about facts is that they’re, you know, factually check-able. I am not going to get into the specifics of the questions asked but, in the USA, there is indeed one group of voters who has shown a relatively larger tendency to dismiss ‘facts’ when said facts did not suit them…

Now, it is interesting to learn that this tendency might be mostly about tribal affiliation and there should be a way for politicians to simultaneously gratify this tendency without threatening to disrupt the political process and the seeking of workable compromises…

But let’s not play “both sides are responsible” – Not in the USA.

RPLong June 4, 2013 at 9:45 am

I don’t believe in sides, I believe in human beings. If you generally accept the proposition that the full spectrum of political thought in America can be represented by only two competing sides, one of which being more factual than the other, then I have an Amazon gift card you might be interested in…

Tarrou June 4, 2013 at 9:45 am

Yes, “check-able” by who? Because I’ve noticed that the people who tout the power of fact-checking will generally link to fact checkers from the same side of the political spectrum they inhabit. And those fact checkers have an uncanny ability to frame the question of fact in ways that benefit their political friends and harm their political opponents. And sometimes the fact-checkers just straight up lie for a while, then correct themselves once their guy is through the critical election.

TL:DR – Fact checking is just the latest partisan lie.

Claude Emer June 4, 2013 at 11:32 am

Is everything really a matter of belief? “Were WMD found in Iraq?” “Did the deficit grow under Reagan?” “Were there an unprecedented number of filibusters in the period 2006-2012 compared to any other six year period in our history?” All those are facts verifiable by checking the National Archives. No belief necessary. It shouldn’t take too much effort to come up with a questionnaire resistant to dogma.

Tarrou June 4, 2013 at 11:42 am

@Claude

There are verifiable facts. What you can’t trust is any one person to reliably arbitrate them. For instance, your framing of “were WMDs found in Iraq?”. No, of course they were not. WMD blueprints, production facilities and hidden labs were found, but no WMDs. And if one framed the question as “Did the US government have reason to believe, in 2003, that Iraq had WMDs?”, then you find the answer easily reversed. Add in appeals to authority, basic metaphysical uncertainty, shibboleth words, personal bias, peer pressure, and you quickly find that real, verifiable “facts” are pretty thin on the ground. And finding a human being capable of judging these facts in a completely fair and evenhanded way is totally impossible, hence my skepticism not of facts, but of “fact checkers”.

JWatts June 4, 2013 at 1:05 pm

No, of course they were not. WMD blueprints, production facilities and hidden labs were found, but no WMDs.

In the next quarterly report, after the war, the total amount of proscribed items destroyed by UNMOVIC in Iraq can be gathered.[76] Those include:

50 deployed Al-Samoud 2 missiles; Various equipment, including vehicles, engines and warheads, related to the AS2 missiles; large propellant casting chambers; 14 155 mm shells filled with mustard gas, the mustard gas totaling approximately 49 litres and still at high purity; Approximately 500 ml of thiodiglycol; Some 122 mm chemical warheads; Some chemical equipment; 224.6 kg of expired growth media

http://en.wikipedia.org/wiki/Iraq_and_weapons_of_mass_destruction

Jim June 4, 2013 at 8:54 pm

Today I learned that there are still people who don’t know that WMD were found in Iraq. Incredible.

Willitts June 4, 2013 at 9:34 pm

Tarrou gets it exactly right with how questions are framed and what basis of knowledge people have, and nit wits immediately respond with their partisan biases, exposing which side really doesn’t care about the facts or meta-facts.

What we found or did not find in Iraq was never the issue. Some people don’t understand the concept of burden of proof. Iraq was under sanctions to adequately demonstrate that their WMD had been destroyed, and were not merely absent.

That said, I have no idea what the president knew or thought about WMD. If we had those facts, we might still disagree on a course of action.

You keep using this word “facts.” I do not think it means what you think it means.

dan1111 June 4, 2013 at 9:53 am

Excellent point! There’s only one thing I’m not sure of: which side are you talking about?

Bernard Guerrero June 4, 2013 at 3:48 pm

+1

Jim Clay June 4, 2013 at 10:55 am

The irony and “lack of self awareness” meters are pegging already in this thread.

Brian Donohue June 4, 2013 at 4:08 pm

Quite breathtaking actually.

Jeff June 4, 2013 at 11:28 am

>>there is indeed one group of voters who has shown a relatively larger tendency to dismiss ‘facts’ when said facts did not suit them…

I would bet money that you are referring to the “other side”. And also that members of that group would have similar comments in return. Any takers?

Tarrou June 4, 2013 at 11:33 am

Nope, everyone knows that only Those Other Guys are knowingly and blatantly ignoring the facts, while Us Guys are pure and innocent truth-seekers with no partisan bias.

Doug M June 4, 2013 at 1:39 pm

+1

Doug M June 4, 2013 at 1:38 pm

You may have just proved the point. You are willing to change your perception of the facts fit your party.

Willitts June 4, 2013 at 5:14 pm

How might you design an experiment that rewards people for lying, Bill?

Hire judges and attorneys and pick random people for jury duty to decide who gets money and who goes to jail. Put them in a building with oak paneling and marble floors. They’ll create the experiment themselves.

Mm June 4, 2013 at 8:56 am

How is that different than gov’t employees, beneficiaries(welfarites, SS, etc), contractors etc voting for more gov’t spending, knowing that will lead to more deficits but benefit themselves?

Claude Emer June 4, 2013 at 9:35 am

There’s a difference between making false claims because one benefits from and simply voting one’s interest. One is dishonest and self interested and the other is just self interested. What would an experiment look like to root out false equivalence?

To the larger point, all deficits are not created equal. Some government spending and tax cuts are stimulative while others are wasteful. Same with deficits. Depending on the situation deficits can be necessary or harmful.

JWatts June 4, 2013 at 2:18 pm

To the larger point, all deficits are not created equal.

Hmm, that quote reminds me of another quote: …some animals are more equal than others.

mm June 4, 2013 at 8:26 pm

it all depends on whose goose is being stimulated- my constituents & cronies or yours

Claude Emer June 4, 2013 at 9:54 pm

That’s assuming the only way draft economic policy is to favor some and neglect others. It’s decades of being trained to think that politics is a football game between Tribe A and Tribe B and only one of the teams can win at any given time.

Ultimately, the post is about the dishonesty of people choosing to falsify facts they find inconvenient. As Lauryn Hill once sang “Men without conscience will even lie to themselves…” And we’re all turning into men without conscience. It was just a couple of days ago MR posted that for pundits it was more beneficial to be confident than to be right.
Sociology 101: it’s more beneficial to be part of the tribe than to be right. So yes, people vote against their own interests for their tribesmen.

JWatts June 4, 2013 at 10:28 pm

Are you confident about that?

Willy Woulda Wonka June 5, 2013 at 10:29 pm

Tax cuts led to higher tax revenue in the 60s after Kennedy cut taxes, in the 80s after Reagan cut taxes and in the 00s after Bush cut taxes.

Todd June 4, 2013 at 7:56 am

This is fine, but the problem in the current system is exactly the reverse, and yet proves the same general point in actual practice. Partisans are rewarded with financial and political security for being MORE partisan. The states have gerrymandered 300+ very safe partisan seats in Congress; it’s much easier for a strident partisan to raise more money and gain/maintain a House/Senate seat; and the media follows around political flamethrowers rather than pay any attention to the proposals/ideas of the remaining moderate pragmatists.

Willy Woulda Wonka June 5, 2013 at 10:31 pm

“The states have gerrymandered 300+ very safe partisan seats in Congress; it’s much easier for a strident partisan to raise more money and gain/maintain a House/Senate seat; ”

You realize senate seats can’t be gerrymandered right?

Isaac Shalev June 4, 2013 at 7:57 am

What politicians say and how they govern are not the same thing. Moreover, as a voter in a representative democracy, I can’t vote for policies. Instead I vote for people who will uphold some basic ideas about government and society. The signaling that happens in media appearances and TV ads and so forth does an excellent job, for the most part, of defining the candidates as starkly as possible from one another. These aren’t bugs, they’re features.

Brian Donohue June 4, 2013 at 4:11 pm

Great point. Never listen to anything politicians say, just watch what they do.

By their fruits ye shall know them.

DanC June 4, 2013 at 8:24 am

Politicians often make comments that they don’t believe personally but that they feel they must say to win support. This is shocking? Politicians want to maximize votes and contributions. They say what they need to say to maximize their goals. Politicians represent various interests that are often at odds.

During the Civil War abolitionist represented about 5% of Northern voters. However the two dominate parties were rather evenly divided. This gave the abolitionist voters greater power as a key marginal voter.

DanC June 4, 2013 at 8:28 am

Sorry hit send too quick

The more power you give the government the more politicians will fight to reward key marginal voters. Often to the detriment of the general society. The source of the failure is giving greater and greater power to the state.

buddyglass June 4, 2013 at 8:33 am

All this says to me is that partisans are aware that their answers are “partisan” and simultaneously aware of what the “generally accepted” answer is, even when it differs from their own, and are capable of giving the “generally accepted” answer when money’s on the line. Even if they don’t believe it’s correct.

Also: If the questions they asked were “purely factual” then how was it even possible to measure partisanship in the answers?

Brent June 4, 2013 at 8:53 am

My thoughts exactly. Many things are complicated and so people may believe, for example, that someone’s testimony about Sadaam’s WMDs proves he had them / are still hidden somewhere. Yet most people who care enough to be labelled partisans know what the “right” answer is to a WMD in Iraq question.

prior_approval June 4, 2013 at 8:59 am

2+2=5 when necessary?

And we don’t even have a Room 101 to help people grasp how it works.

buddyglass June 4, 2013 at 9:03 am

I do believe in the general concept, though, that “putting money on the line makes people less likely to claim outlandish things”. If God appeared to a bunch of folks claiming to be “100% sure” that Obama’s secretly a Muslim and said to them, “I’m God so I know whether he is or he isn’t. I’ll ask you again whether he is, and if your answer is incorrect then I’m killing you on the spot. And you’re not going to the ‘happy place’ when you die,” I’m guessing we’d find out that some them aren’t actually “100% sure”.

Andrew' June 4, 2013 at 10:40 am

People believe that pressure cookers that killed fewer people than a snub nose 38 special are now WMDs and I can’t see they get anything out of it.

dan1111 June 4, 2013 at 9:09 am

I think some questions can be purely factual, and yet show partisanship in the answers. “Did inflation fall under Reagan?” is a good example. It is part of the public record and not really disputable, but I would expect answers to skew in a partisan way, because people don’t know the answer and instead make assumptions based on their beliefs.

I think your general point is very good, though. It all depends on what the actual questions were (also, a breakdown by question would be interesting). Too bad someone has money on the line when it comes to letting us read the paper!

buddyglass June 4, 2013 at 10:46 am

“I think some questions can be purely factual, and yet show partisanship in the answers. “Did inflation fall under Reagan?” is a good example.”

Point taken.

Dan Weber June 4, 2013 at 12:02 pm

Yeah, it takes a little work to come up with objective questions, but you can.

“Is global warming real?” can be quite loaded, but “what has been the trend of the measured worldwide temperature from 1960 to 2000? and from 2000 to 2010?” are purely objective.

Although I’d like to express the “did inflation fall” more precisely. Inflation both rose and fell under Reagan, just like tax rates both rose and fell. You probably want to ask “how did the inflation rate of 1981-1982 compare to the inflation rate of 1987-1988″?

Brian Donohue June 4, 2013 at 4:14 pm

How did you objectively settle on those end points?

Michael June 4, 2013 at 8:56 pm

Inflation is a horrible example of a purely factual question. The CPI is a matter of public record, but the concept of inflation is open to interpretation. Just ask a gold bug. Even narrowing to the question to the CPI, a person could reasonably accuse the BLS of fudging the numbers or an invalid methodology.
I agree with buddyglass both in that the concept seems correct (even obvious) and that the experiment itself isn’t convincing. The game is for subjects to guess at the examiner’s beliefs.

Norman Pfyster June 4, 2013 at 8:44 am

I don’t see the implications for democracy. Neither policy goals nor their relative weighting has anything to do with accuracy.

prior_approval June 4, 2013 at 9:02 am

The implication might be something along the lines that voting is a waste of time, so don’t vote.

Call it a much more refined version of Newspeak principles, where the rational person simply wastes no time on participating in democracy, because really, democracy is just a hindrance to those who are reasonably convinced that they will never have a majority support them.

Just ask Pres. Romney how that math works out.

mw June 4, 2013 at 8:57 am

“Voting is just another survey without individual consequence so voting encourages expressions of rational irrationality and it’s no surprise why democracies choose bad policies.”

Terrific point. This just shows the critical value of lobbying, so that people who *do* have lots of money on the line can “help” our legislators to make better policies.

mulp June 4, 2013 at 2:21 pm

So, you believe conservatives are absolutely nuts to work hard to get out their conservative voters in every election while trying to convince the more liberal voters that voting never changes anything, not to mention such things as claim rampant voter fraud without evidence, and voter roll purges, closing neighborhood polling places, etc.?

Republicans have lots of evidence to back their claims they can takeover Congress in 2014 based on progressive voters not bothering to vote because conservatives have sold them on the Democrats being just as bad as the Republicans so voting never matters.

derek June 4, 2013 at 9:08 am

This is why deficits are a bad idea. Both partisan extremes use deficits for their partisan purposes which removes the necessity of voters paying for what they vote for.

mulp June 4, 2013 at 11:42 pm

Define deficit.

Is it a deficit when you borrow $500 million to build a bridge and at the same time put in place a toll that will service the debt and maintain the bridge?

That can be done by both government and the private sector.

I can’t think of anyone in the past four decades saying that a toll bridge or a store chain be finance purely by stock offerings with the money collected never intended to be returned, and only dividends paid. Instead money is borrowed and spent – stores are generally borrowing money to buy stock and constantly refinance the debt with stock turnover, with more debt as more stores are opened.

Until the conservatives took over in 1980, that is the way the Federal government operated. Constantly turning over the debt as capital was built and then paid off while new capital was built and paid off.

But with the conservative economic policies of Reagan, debt was used to finance cutting prices – taxes – on the theory that the demand for more government would generate more revenue. Or something like that…

And ever since, Democrats are attacked for hiking the price of government to pay for the government We the People demand. Republicans keep promising to cut the price and thus the demand for government, but they keep finding We the People demand more government, so they attack Democrats for cutting government where Democrats think the cuts should be. Republicans want Democrats to take the blame for cutting government where Republicans want the cuts.

cobacoba98 June 6, 2013 at 3:40 am

You do know that Tip Oneil was supposed to deliver budget cuts to offset the tax cuts, right? That did not happen of course.

And you do know that Democrats have often been in power and have not raised taxes enough to cover their own spending?

And you do know which party created Medicare and SS and convinced people they were “paying in” and that these are like their own accounts, and if you wish to reform them, will run ads literally showing the reformer as “pushing grandma off the cliff?”

Matt June 4, 2013 at 9:13 am

It’s not clear that the experimenters teased out what the subjects think is true, versus what they know is the generally accepted answer. Suppose the questioners had decorated the waiting room with posters and magazines advocating that Dick Cheney was _really_ behind 9/11. And then told the subjects that they would be paid money for truthfully answering who was behind 9/11. How much would people modify their beliefs then?

Alan H. June 4, 2013 at 9:16 am

Democracies vote for bad policies? Sweden? Switzerland? Are the policies of PRC better?

It is no surprise that voters seek to join alliances built around a very small collection of self-rewarding policy goals. We do not get to choose policies, but rather ‘representatives,’ who themselves have one target, which is to build a winning election-day coalition. Voters do not choice an energy policy, health care policy, education policy, and so forth, the representatives do, after the election. Therefore, rationality guides partisan voters to support false narratives around all secondary policy points.

If you want better policies bolt a plebiscite package onto the Constitution. Under no other system can good policies be voted in and protected from sabotage by the momentary political needs of the ‘representatives’ in office.

It's Over June 4, 2013 at 9:51 am

Totally works for California!

Nick June 4, 2013 at 10:37 am

Compared to what you might otherwise expect from such a population, California is surprisingly well-governed.

Nick_L June 4, 2013 at 10:50 am

“California is surprisingly well-governed” – What are your KPI’s for that statement? Most of the stuff I see, indicates that California is in a bit of a hole these days?

Tarrou June 5, 2013 at 9:31 am

It is, but considering that a third of the state (very roughly) are immigrants of varying nationalities and legality, a third are the remnants of the great hippie migrations of the ’60s and ’70s, and it contains the second-largest megalopolis in the nation, perhaps that is unsurprising.

cobacoba98 June 6, 2013 at 3:44 am

Yes, 10th in taxes, and 49th in educational result. Excellent value for money.

Please compare to TX which is similar in size, blessed with similar natural resources, also has a border with Mexico.

Anon. June 4, 2013 at 11:51 am

I don’t see how you can mention Sweden as a positive example…the history of responsible government policies in Sweden is about 10 years old. Their blunders in the late 20th century were absolutely immense.

KPres June 4, 2013 at 3:15 pm

Sweden had the world’s second-highest per capita GDP in 1965. Today they hover around 15th. Don’t know how that signifies good governance.

Philo June 4, 2013 at 10:02 am

A useful post. Attention, Bryan Caplan!

michael June 4, 2013 at 10:14 am

In ‘Antifragile’, Taleb makes the same argument about all those financial pundits on CNBC, FoxBiz, etc. They don’t have ‘skin in the game’ so their recommendations/observations on stocks and bonds are meaningless…..for if they’re wrong there’s no downside for them.

ladderff June 4, 2013 at 10:20 am

OK then, Alex: do you renounce democracy?

Turkey Vulture June 4, 2013 at 10:40 am

If I take a test at a Christian Church that offers better odds at a gift card for a correct answer, my answer to “Who died for our Sins?” will probably be closer to “Jesus” than “Nobody.”

Dhzokhar Tsarnaev is charged with “using a weapon of mass destruction,” so by that metric, WMDs were in fact found in Iraq.

Andrew' June 4, 2013 at 11:19 am

Over here, nukes and pipe bombs are exactly the same. Over there, it’s “meh, don’t worry about securing the ammo dumps.”

Ashok Rao June 4, 2013 at 11:30 am

Alex, some of the reasons this study was conducted (media bubbles etc.) may be reasons why democracy doesn’t always work, but the findings aren’t. The actual voting electorate by definition does not feel voting is like a survey for “cheap talk”. If they did they would not vote. Further more, it’s a secretive ballot. Ipso facto, if they waste their time to vote, they feel as if (a) it has real consequences or (b) they are duty-bound to vote for the right person.

Furthermore, even if someone’s opinion is distorted by party-affiliation, they are *choosing* to be in that party. That’s a rational decision, usually (even if from misinformation and network effects). I definitely think that once you’re at the ballot box, there is every incentive to reveal true beliefs (to the machine..)

http://bit.ly/14edkmI

KPres June 4, 2013 at 3:37 pm

“Furthermore, even if someone’s opinion is distorted by party-affiliation, they are *choosing* to be in that party.”

Yeah, but what if they’re in that party because somebody from the other party called them a mean name one time? And they vote just want to stick it to the other guy. That could lead them to voting for policies they don’t actually favor. I actually think a significant number of votes happen this way.

Da June 4, 2013 at 11:35 am

While I generally like the post and the cited experiment, I see a problem with reducing democracy to simple “facts”.

While in an enlightend society this might be a working measure, in our reality facts are usually seen without the context. Not necessarily with bad intentions but just due to the fact that many voters (and politicians) by now are unable to understand the context.

So chosing which facts to ask for is partisan in itself. To give factual wrong answers might just be a self-defense machanism against partisanly (is that a word?) chosen factual questions.

In other words: We more or less consiously lie to the questioners because we do not trust them to ask their questions with honest intentions. Every question that is asked is indeed interpreted as a trap, because we assume, that our answer will be as much out of context as the question is.

For example your WMD-question. Say you were in favor of an invasion of Iraq. If now you would admit to there being no WMDs, would you get a chance to then still present your argument why it was a correct choice at that point in time or will the questioner end his questioning calling the case case settled?

By chosing out-of-context question as well as by lying when answering both parties engange in a game of strawmanship because they are unable to engage in real discussion.

Betting would then not be a tax on bullshit but a tax on those who have to answer paid to those who get to ask the questions.

Steven Kopits June 4, 2013 at 11:51 am

So, Alex, you are asserting that incentives make a difference to policy choices. OK, welcome to the world of Adam Smith.

Now, your post argues that incentives matter to principals, ie, voters. OK. Can we then extrapolate that incentives also matter to agents, ie, elected politicians? Do we then conclude that if the incentives of politicians were aligned, then partisanship would be significantly reduced? Is that the thesis?

Well then, all we have to ask is what those incentives should be.

You note democracies may choose bad policies–but that is bad policy from the perspective of the economist, not the voter. The (classically liberal) economist implicity wants growth and respect for the scarcity of resources (efficiency). And that’s one objective function of democracy.

But another, perhaps more compelling objective function, is the reallocation of property rights from one social group to another. Democracy is also about splitting up the pie. Whether I as a voter am interested in aggregate growth or splitting up the pie is a function of three factors: i) time preference for consumption (am I willing to defer income today for more income tomorrow?), ii) belief in the probability of growth (will things actually get better if I support a pro-growth policy?), and iii) the proportional allocation of the national growth to myself (will the fat cats get all of the benefit, or will it trickle down?). Now, if the answer to any of these three questions is “no”, then I may support policies which lead to a short term redistribution of others’ incomes to me. I may support policies which benefit myself now, but are harmful to society as a whole or even myself in the long run. Isn’t this the story of, say, Italy; or of labor unions in Detriot; or off balance sheet pensions liabilities in America’s municipalities?

So government has at least two (I would argue three) legitimate and incompatible objective functions: maximization of long-term aggregate growth and short-term maximization of benefits to particular voting blocks. Bryan Caplan would argue that this latter camp represents “bad policy”–but it is entirely legitimate and valid in a democracy.

If you want policy to focus on long-term aggregate growth (“good policy”), then clearly we need specific incentives to promote such it. We need to pay politicians for performance, specifically a bonus calculated as a function of GDP growth minus the growth of debt. That’s where your line of argumentation will ultimately take you.

KPres June 4, 2013 at 3:56 pm

“So government has at least two (I would argue three) legitimate and incompatible objective functions: maximization of long-term aggregate growth and short-term maximization of benefits to particular voting blocks. Bryan Caplan would argue that this latter camp represents “bad policy”–but it is entirely legitimate and valid in a democracy.”

Bad policy is that which leads to a society different from voters’ ideal, no? Voting out self-interest means that democracy becomes one gigantic tragedy of commons, with the outcomes mis-aligned with the voters’ ideal. So…bad policy.

Steven Kopits June 4, 2013 at 6:16 pm

KPres -

You seem to be arguing that there exists some notion of a Pareto Optimal Society (POS), which is better than every other vision of society. If we have two competing objectives functions, a POS cannot exist by definition. Because there are so many preferences out there, an infinite number of societies may exist which are not provably superior to other versions. Indeed, even a single objective, conservative society will have an infinte number of non-inferior outcomes. In such societies, the allocation of effort and reward is central and potentially zero sum. For example, bonuses not given to managers are retained by owners, and vice versa. Thus, the method of allocation is central, but one method is not necessarily superior to another. Each of these outcomes will be aligned with some voters’ ideals, and in contrast with those of others. So is the outcome good or bad? That depends on who you are, but there is no “right” answer per se.

As for establishing the sort of policy which MR readers think of as “good”, well, that’s trivial. It’s just a matter of installing the appropriate incentives. Any management consultant (but no economist) could do it with about two days of effort for any given country.

zz June 4, 2013 at 12:02 pm

The betting doesn’t incentivize them to tell the truth, it incentivizes them to give what they think the interviewer believes is the correct answer. This is is just an acknowledgement that their viewpoint is not popular, nothing more.

KPres June 4, 2013 at 3:45 pm

Good point. They should have used a lie detector to measure rather than simply grading “right” or “wrong” questions.

JWatts June 4, 2013 at 2:26 pm

Could they add a question about “Obamacare bending the cost curve downward” to the poll? ;)

JWatts June 4, 2013 at 2:40 pm

The comment answers above are in many cases indicative of the problems we face in communicating. There really are no clear cut answers and we all suffer from biases.

One of the most pointed examples: “Were WMDs found in Iraq?”

Fact: Yes, small quantities of mustard gas, sarin nerve agent, thiodiglycol, 2 tons of low-enriched uranium and various manufacturing equipment and chemicals necessary for chemical weapons production were found.

Opinion: No, while small amount of WMD’s were found, they were all overlooked remnants of older stockpiles and weren’t significant.

Now, I happen to believe the stated Opinion, but I recognize the difference between a Fact and an Opinion.

Dana June 4, 2013 at 3:13 pm

“Voting is just another survey without individual consequence so voting encourages expressions of rational irrationality and it’s no surprise why democracies choose bad policies.”

Bad policies relative to what? By what criteria? This seems like troll blogging or something. We find out that people actually have a factual basis for their opinions and Alex concludes this is the root fault of democracies. Understanding that inflation fell under Reagan does not preclude one from believing that inducing a recession to accomplish that goal was bad policy. You may disagree, of course, but that does not make the voter who believes it irrational.

Dana June 4, 2013 at 3:16 pm

And I realize that Reagan had little to do with those policies, which is a whole other problem with the correlation=causation thinking that dominates our partisan “discourse.”

KPres June 4, 2013 at 3:25 pm

That’s not what he means by rational irrationality. What he means is that voters have little incentive to investigate whether inducing recession was good or bad policy. Thinking clearly and honestly takes effort, and voters don’t get rewarded for that effort, so their rational choice would be to adopt whatever lazy opinion first pops in their head.

Dana June 4, 2013 at 3:50 pm

I think you (and he) are assuming facts not in evidence. How do we know that voters are not aware of benefits and drawbacks of recession-induced deflation? That “partisans” were aware of the underlying facts of the issue suggests that they undertook some amount of investigation and consideration and that the resulting opinion was not arrived at in a lazy way.

If a pollster asks me “Has the federal budget deficit exploded under the Obama Administration?” I’m likely to say no, even though I’m quite aware that we’ve seen huge deficits since 2008. Is that a “lazy” conclusion on my part, or a recognition that someone was trying to manipulate my knowledge to benefit their political purposes and a decision by me not to be a part of that farce?

KPres June 4, 2013 at 4:24 pm

There’s no assumption at all. We’re just talking about how the incentives align.

Dave Pinsen June 4, 2013 at 6:50 pm

” Voting is just another survey without individual consequence so voting encourages expressions of rational irrationality”

Voting has individual consequences for those who are net income tax payers. It’s interesting to consider how policies would be different if only those who paid net federal income taxes voted.

mw June 4, 2013 at 8:35 pm

Since “federal income taxes” are clearly the only real taxes, shouldn’t we just abolish payroll taxes? I mean if they don’t count, why have them?

Mike H June 4, 2013 at 9:22 pm

Baltic states, Poland, Czech Republic, Slovakia, Hungary, Romania, and arguably Ukraine, Georgia and Mongolia as well. Democracy has been a positive force in these post-communist states where the average voters, learned from their personal experiences, utterly reject communism and any relic of planned economy associated with it. As a result, supports for free market policies have been exceptionally strong in these countries.

It’s not impossible to make voters rational. You just need to make them realize the consequences of their votes will ultimately come down to a personal level.

chris knowles June 4, 2013 at 10:46 pm

I think you’re shoveling the BS. So now, lets put the money argument aside for a moment. Your thinly veiled swipe at non-fact checking Republicans (Reagan, WMDs) doesn’t take some recent facts into consideration Benghazi, IRS, AP/Fox News …

so what are you offering as an alternative?? Yawn …

bellisaurius June 4, 2013 at 11:18 pm

I do wonder how much of this is gaming. Like when playing trivial pursuit and realizing what the game wants to hear, and what the more correct answer is (they wanted the date of the personal union of catsille and aragon, vs when Spain was created as a country proper).- I know both, but I like to win the game, so I answer what I think they want to hear.

Ironically, forcing me into a different sort of BS.

Wolfman Jake June 5, 2013 at 11:04 pm

Members of California’s police departments constantly insist that their generous retirement benefits are justified because “the average policeman lives only 7 years after they retire at age 55.” The actual longevity is to 84.5 years old, not 62 Surely, the retirees can just look at their friends and see the claims of early death are not true; however, they have an overwhelming self-interest in this story therefore many of them “believe” it. At least they refuse to admit to not believing it. People believe what they want to believe even if they have to lie to themselves to do it.

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