January 28, 2006

Irrational voters

Bryan Caplan is about to publish a book which still has no definitive title. In it Caplan argues that voters are both ignorant and irrational (as voters, that is; not in other aspects of their lives). To attract votes, politicians promise policies that are popular instead of optimal. So democracy delivers bad policies. The alternative is not dicatorship, which usually works much worse, but individual decision-making and responsibility. Educating voters or cleaning up the campaign finance mess will not work.

In classical public choice theory voters are rationally ignorant because they lack incentives to inform themselves. Learning about policy is costly, the probability that anyone's vote will affect the outcome of elections is negligible, and the costs of choosing the wrong candidates are borne by everyone, not just the voter. According to Caplan "voter ignorance is a product of natural human selfishness, not a transient cultural aberration."

If voters' mistakes were random in direction the problem would disappear because in large electorates mistakes would cancel out. But on many matters of policy voters make systematic errors. There is no cancelling out; the average voter is wrong. Witness popular beliefs related to economic policy:
People do not understand the "invisible hand" of the market, its ability to harmonize private greed and the public interest. I call this anti-market bias. They underestimate the benefits of interaction with foreigners. I call this anti-foreign bias. They equate prosperity not with production, but with employment. I call this make-work bias. Lastly, they are overly prone to think that economic conditions are bad and getting worse. I call this pessimistic bias.
And it is not only that voters are ignorant. Caplan's main original contribution to public choice theory is that voters are irrational.
Economists usually presume that beliefs are a means to an end, not an end in themselves. In reality, however, we often have cherished views, valued for their own sake. [...] Political/economic ideology is the religion of modernity. Like the adherents of traditional religion, many people find comfort in their political worldview, and greet critical questions with pious hostility.
Just as ignorance is more profitable to voters than information, irrationality is more profitable than rationality. It feels good, it is inconsequential because your vote is not decisive, and everyone, not only the voter, shares the costs. For the individual voter the costs of irrational ideology are negligible compared to the benefits.
So we should expect people to "satiate" their demand for political delusion, to believe whatever makes them feel best. After all, it's free.
What is the role of special interest groups in this scheme of things? What about the media? Caplan has answers. Until his book comes out you can read this appetizer.

1 comment:

  1. This looks like an interesting book. Hopefully he will end it with some realistic ideas for improving the system.

    ReplyDelete