Category: Political Science
Political vs economic competition, or why a two-party system can be OK
Max Kaehn, an occasional MR commentator, expressed a common sentiment when he wrote:
You think a voting system that sticks us with a two-party cartel instead of a diverse market in political representatives isn’t a major problem? Are you sure you’re an economist?
Here are a few reasons why political competition isn't the same as economic competition:
1. Economic competition lowers costs. For the average worker, it cost a month's wages to buy a book in eighteenth century England and today it might cost well under an hour's wage. The competitive incentive to use and introduce new technologies drove that change. Political competition may support cost-reduction enterprises in an indirect manner, by providing good policy and spurring the private sector, but the mere ability to supply candidates and parties at lower cost is no great gain.
2. Having lots of parties means you get coalition government. This works fine in many countries but again it is not to be confused with economic competition. Coalition government means that say 39 percent of the electorate gets its way on many issues, while 13 percent of the electorate — as represented by the minor partner in the coalition — gets its way on a small number of issues. Whatever benefits that arrangement may have, they do not especially resemble the virtues of economic competition.
3. Many people think that greater inter-party competition, and/or more political parties, will help their favored proposals. Usually they are wrong and they would do better to realize that their ideas simply aren't very popular or persuasive.
4. Often the U.S. system is best understood as a "no-party" system, albeit not at the current moment, not yet at least. The bigger a party gets, often the less disciplined it will be.
5. Stronger electoral competition, in many cases, brings outcomes closer to "the median voter or whatever else is your theory of political equilibrium." That's better than autocracy, but again there are limits on how beneficial that process can be. It's not like economic competition where you get ongoing cost reductions in a manner which saves lives, brings fun, and enriches millions.
The bottom line: Political competition is better than autocracy, but its benefits are not well understood by a comparison with economic competition.
Range voting
A few readers asked me to discuss range voting. Wikipedia defines it as following:
Range voting (also called ratings summation, average voting, cardinal ratings, score voting, 0–99 voting, or the score system or point system) is a voting system for one-seat elections under which voters score each candidate, the scores are added up, and the candidate with the highest score wins. Range voting was used in all public elections in Ancient Sparta in the form of measuring how loud the crowd shouted for different candidates.[1] Approval voting can be considered to be range voting with only 2 levels (approved (1) and disapproved (0)).
The main question to get out of your head is whether or not range voting satisfies Arrow's Impossibility Theorem. (In fact it doesn't, most forms of range voting violate the independence of irrelevant alternatives, but don't worry about that!). There's no major reason why a democratic system should follow all of Arrow's axioms as defined across universal domain, which means you have to rule out the very possibility of paradoxes. Can anyone do that? No, not even when you're deciding which book to read next. (But should you stop reading? No.) We do, however, care if the system can:
1. Deliver decent economic growth and an acceptable level of civil liberties.
2. Build consensus and legitimacy going forward, and
3. Toss out the truly bad politicians.
Ideally, we'd even like:
4. The democratic process itself educates people, raises the level of discourse, and makes for a better society.
On those counts, it is not clear what advantage range voting brings over either a two-party winner-take-all system or some form of proportional representation. Do we really need to count the preference intensity of voters? That could sooner be harmful in extreme situations. Do we really need to teach voters complicated aggregation systems? The relatively well-educated Germans used a "vote twice but ultimately only the party vote counts" form of PR and for decades most of them never understood it and now they are changing it, finally.
Most countries don't use range voting. Ireland and Tasmania have had some experience with the Single Transferable Vote (STV) system. What happens is that a bunch of candidates run for each post, party identification is weak, and reps emphasize constituency service. That's probably the major dominant effect, namely that most systems of range voting weaken political parties.
The bottom line: Range voting is a solution in search of a problem. The main problems with democracy include poorly informed, irrational, and short-term voters and politicians. Range voting doesn't cure any of those and arguably by weakening party affiliation it makes some of them worse.
A public choice theory of the filibuster
Senators like the filibuster. It keeps them relevant when they're in the minority. It makes their chamber a lot more powerful than in the House, and ensures that the leadership has to listen to their concerns more closely.
That's Ezra Klein, here is more.
Whoops!
If you believed all the talk from Chrysler about how our tax dollars would help finance its fast-track electric-vehicle future, you're in for a big disappointment.
Chrysler has disbanded the engineering team that was trying to bring three electric models to market as a rush job, Automotive News reports today. Chrysler cited its devotion to electric vehicles as one of the key reasons why the Obama administration and Congress needed to give it $12.5 billion in bailout money, the News points out.
The link is here and I thank John Nye for the pointer.
China claim of the day
If China remains culturally closed, the Chinese Century will never come to pass. Instead, the United States–a country that has struggled with race and racism for centuries, and in the process has become more culturally open and resilient–will dominate this century as it did the last.
That's from Reihan Salaam, who discusses how far the problem of Asian racism is from being solved.
How to run a successful blog
…They understand that public opinion matters…they understand that it’s a little harder to criticize someone after you’ve met him and he’s given you free cookies…they couldn't possibly have expected to change anybody’s mind, they understand that it’s better to talk to your critics than to avoid them. Waldman talks about some of the techniques used to make the attendees [readers] feel like they were being treated as special guests.
Whoops! That's not advice for running a successful blog. Those are James Kwak's comments on how Treasury tries to trick visiting bloggers. We bloggers should know. We give away lots of free stuff too, more than cookies even if it is sometimes sour rather than sweet.
Impressions from Treasury
I will enumerate a few (you can trace other accounts here):
1. Tim Geithner is very smart and he was conceptually stronger than one might have expected.
2. I believe that the long, L-shaped hallways encourage "visits to offices" rather than hallway conversations; this is a speculation and perhaps some reader can confirm or deny it.
3. The quality of the painted portraits of Treasury Secretaries declines as time passes.
4. The free cookies were good and fresh, with a warm, fluid chocolate interior. There was water to drink, but no mineral water.
5. For all their talk about outreach, etc. I believe at least a few of them wanted to hear from an outside source whether we think they are totally ****ed or not. They heard.
6. I worry less than did some of the other bloggers about the Treasury awareness of major economic problems going forward. As governmental institutions go, Treasury has a real incentive to a) worry about the fiscal future, and b) worry about worst-case scenarios, including for financial institutions. Their daily interaction with the bond market gives them a longer time horizon and a more economics-friendly perspective than most of their bureaucratic counterparts. The problem is Congress. For instance if someone at Treasury had a Yves Smith view of the banking system, they could not much act on it.
7. "You guys are a welcome change of pace," or something like that, remarked one senior Treasury official. Although this was flattery, I believe it was meant sincerely. They were also a welcome change of pace.
8. I asked one senior Treasury official which book, thinker, or economic theorist had most shaped his thinking about the financial crisis. In the ensuing discussion the book Lords of Finance was recommended, though I could not say whether it was intended as a totally direct answer to the question as stated.
I have a bad feeling about this
Here is the latest on Tysons redevelopment:
Remaking Tysons Corner
into the second city of Washington will take a lot more than a new
Metro line and a downtown of tightly clustered buildings designed for
walking. It will take almost $15 billion in new roads and public
transportation.
Even in this age of sticker shock, that's a lot of money for a local project. You'll recall my earlier prediction that Tysons will get the road widenings but not enough of the other changes needed to make it a walkable downtown; the road widenings will on net make things worse. Call me an apologist for suburbia if you wish, but I sooner view myself as an apologist for public choice theory. Some parts of the redesign will be more popular than others and we will get a very unbalanced mix of reforms. This is indeed what I predict:
The numbers also have prompted some proponents of dense development in
Tysons to argue that if the county pushes too many costly road
improvements and makes room for more cars, the vision could unravel.
To simply insist that it "should be different," or to charge that I do not spend enough time criticizing interstate highway subsidies, is to miss the public choice point. Now that the stimulus is up and running, you can see road widenings all over NoVa and they will be finished. Who will put up the money for the rest of Tysons reform?
For funding, Fairfax officials say, they will look to the Obama
administration, which is committed to subsidizing growth projects in
urban areas. They hold out little hope from the Virginia Department of
Transportation, which this year slashed the county allocation for
secondary roads to zero. Given the millions of dollars Northern
Virginia has gotten for big projects such as the HOT lanes and new
Woodrow Wilson Bridge, "More state funding is pretty much politically
doomed," said Kathy Ichter, the county's chief of transportation
planning.
Stay tuned…
Words of wisdom, from David Leonhardt
“If the long-term issue is entitlement reform,” says Joel Slemrod, a University of Michigan ist, “the fact that the political system cannot say no to $250 checks to elderly people is a bad sign.”
The full coverage is here.
Successful government bureaucracies
Jason asks:
What are some examples of successful government bureaucracies?
Wars aside, here is a short and very incomplete list: the NIH, the Manhattan Project, U.C. Berkeley, the University of Michigan, Fairfax County, the World Trade Organization, the urban planners of postwar Germany, some of the Victorian public works and public health commissions, most of what goes on in Singapore, anywhere that J.S. Bach worked.
The European Union has been very good for eastern Europe. I'll leave aside the health care issue because we've debated that plenty already. The real question is what all these examples have in common.
From the comments
Isn't it only fair that if companies can bribe and threaten politicians
(by contribution to them or their opponents), politicians should be
able to bribe and threaten companies?
The source is here, from comments on the last post. Arnold Kling comments on related matters.
Sentences to ponder
The EU, Canada, and Japan are in the aggregate much more significant trade partners than China/Mexico/Brazil. And the case for them charging us carbon tariffs seems about as good as the case for us charging the Chinese.
That is Matt Yglesias. Here is more, including a good chart on which countries are our largest trading partners.
Elinor Ostrom and the well-governed commons
Elinor Ostrom may arguable be considered the mother of field work in development economics. She has worked closely investigating water associations in Los Angeles, police departments in Indiana, and irrigation systems in Nepal. In each of these cases her work has explored how between the atomized individual and the heavy-hand of government there is a range of voluntary, collective associations that over time can evolve efficient and equitable rules for the use of common resources.
With her husband, political scientist Vincent Ostrom, she established the Workshop in Political Theory and Policy Analysis in 1973 at Indiana University, an extraordinarily productive and evolving association of students and professors which has produced a wealth of theory, empirical studies and experiments in political science and especially collective action. The Ostrom's work bridges political science and economics. Both are well known at GMU since both have been past presidents of the Public Choice society and both have been influenced by the Buchanan-Tullock program. You can also see elements of Hayekian thought about the importance of local knowledge in the work of both Ostroms (here is a good interview). My colleague, Peter Boettke has just published a book on the Ostrom's and the Bloomington School.
Elinor Ostrom's work culminated in Governing the Commons: The Evolution of Institutions for Collective Action which uses case studies to argue that around the world private associations have often, but not always, managed to avoid the tragedy of the commons and develop efficient uses of resources. (Ostrom summarizes some of her findings from this research here). Using game theory she provided theoretical underpinnings for these findings and using experimental methods she put these theories to the test in the lab.
For Ostrom it's not the tragedy of the commons but the opportunity of the commons. Not only can a commons be well-governed but the rules which help to provide efficiency in resource use are also those that foster community and engagement. A formally government protected forest, for example, will fail to protect if the local users do not regard the rules as legitimate. In Hayekian terms legislation is not the same as law. Ostrom's work is about understanding how the laws of common resource governance evolve and how we may better conserve resources by making legislation that does not conflict with law.
Can a Nobel Peace Prize make peace harder to achieve?
David Axelrod spoke:
“I’d like to believe that winning the Nobel Peace Prize is not a political liability,” said David Axelrod,
a senior adviser to Mr. Obama. “But this isn’t something I gave a
moment of thought to until today. Hopefully people will receive it with
some sense of pride. But I don’t know; it’s uncharted waters.”
Putting aside domestic responses, can holding a Peace Prize make it harder to bring about peace? I believe the answer is yes. The positive scenario is that holding the Prize signals strength and induces other bargainers to jump aboard your winning bandwagon, for fear of being locked out of an eventual agreement. The more negative scenario arises when the Prize holder is expected to pressure Country X, Ruritania. If the Prize holder secretly wishes to favor Ruritania in negotiations, a President without a Prize can to some extent feign or credibly signal weak bargaining power: "I'm sorry, Ruritania just won't budge; you'll have to move closer to their position." It's harder for the Prize holder to send this same signal, since everyone expects him to get Ruritania to budge (if not, the Prize holder also doesn't have any bargaining advantages either). The Prize holder may find it harder to deal with truly intransigient nations; fortunately we don't have many of those in the world right now.
Related arguments are that a Prize can make it harder to practice strategies of "creative ambiguity" or "low expectations."
David Frum suggests the Prize makes it harder for Obama to be hawkish.
China committee of the day
Today's Financial Times writes about the Central Organization Department of China:
To glean a sense of the dimensions of the organization department's job, conjure up a parallel body in Washington. The imaginary department would oversee the appointments of US state governors and their deputies; the mayors of big cities; heads of federal regulatory agencies; the chief executives of General Electric, Exxon-Mobil, Walmart and 50-odd of the remaining largest companies; justices on the Supreme Court; the editors of The New York Times, The Wall Street Journal and The Washington Post; the bosses of the television networks and cable stations; the presidents of Yale and Harvard and other big universities and the heads of think-tanks such as the Brookings Institution and the Heritage Foundation.
All equivalent positions in China are filled by people appointed by the party through the organization department.
I would not want to be on the bad side of the Central Organization Department. The full article, which is interesting throughout, is here. It's also related to why I don't see China just evolving into a normal democracy.