Rat Democracy
Like most people who once
hoped for better, I have become resigned to the accumulation of tawdry detail
about how President Clinton financed his re-election campaign. But condemning
Clinton's brazen opportunism begs the question: Where did the opportunities to
be so brazen come from?
This may
seem to be a question for a political analyst, not an economist. But there is
an approach to political analysis known as "rat choice" (rat as in
"rational"--it's not a comment on the candidates) that flourishes along the
border of the two fields. The working hypothesis of rat choice is that voting
behavior reflects the more or less rational pursuit of individual interests.
This may sound obvious, innocuous, and even excessively optimistic. But if you
really think its implications through, they turn out to be quite subversive.
Indeed, if you take rat choice seriously, you stop asking why democracy works
so badly and start asking why it works at all.
What is the problem? Won't rational voters simply choose
politicians who promise to serve their interests? Well, in a rough sense they
do. The logic of democratic politics normally pushes both parties toward the
center--more precisely, toward policies that serve the interests of the median
voter. Consider, for example, the question of how big the government should be.
In general, people with low incomes prefer a government that imposes high taxes
in order to provide generous benefits. Those with high incomes prefer a
government that does no such thing. The Democrats are, by inclination, the
party of outstretched palms, the Republicans the party of tight fists. But both
are forced to move away from those inclinations toward actual policies that
more or less satisfy the voters in the middle, who don't like paying taxes but
do like knowing that they won't be stuck with Grandma's medical bills.
But there
are lots of issues that are not so big--issues that only involve, say, $10 or
$20 billion a year--like who profits from electricity deregulation, or how much
the government spends subsidizing irrigation water for Western farmers.
Although these issues, cumulatively, are important to the electorate, the
electorate doesn't vote--individual voters do. And it is rarely in the interest
of the individual voter to take the trouble to track the details of public
policy. After all, how much difference will one vote make?
Bells have just started going off in the head
of any reader who remembers Econ 1. What I have just said is that the duties of
a good citizen--such as becoming well informed before voting (and for that
matter bothering to vote at all)--are subject to the dreaded free-rider
problem . The free-rider problem arises whenever some valuable good or
service is not "excludable"--that is, whenever the benefit cannot be restricted
only to those who pay for it. It is clearly in the interest of all boaters to
have a rescue service. But no individual boater has any incentive to pay for
the service if others are willing to do so. If we leave provision of a
lifesaving service up to individual decisions, each individual will try to
free-ride on everyone else, and the service will be inadequate or worse.
The
solution is government. It is in the collective interest of boaters that each
boat owner be required to pay a fee, to support a Coast Guard that provides
those nonexcludable benefits. And the same is true of police protection, public
sanitation, national defense, the Centers for Disease Control, and so on. The
free-rider problem is the most important reason all sane people concede that we
need a government with some coercive power--the power, if nothing else, to
force people to pay taxes whether or not they feel like it.
But there is a catch: The democratic process, the only
decent way we know for deciding how that coercive power should be used, is
itself subject to extremely severe free-rider problems. Rat-choice theorist
Samuel Popkin writes (in his 1991 book, The Reasoning Voter ):
"Everybody's business is nobody's business. If everyone spends an additional
hour evaluating the candidates, we all benefit from a better-informed
electorate. If everyone but me spends the hour evaluating the candidates and I
spend it choosing where to invest my savings, I will get a better return on my
investments as well as a better government." As a result, the public at large
is, entirely rationally, remarkably ill-informed about politics and policy. And
that leaves the field open for special interests--which means people with a
large stake in small issues--to buy policies that suit them.
For example, not many voters
know or care whether the United States uses a substantial amount of its
diplomatic capital to open European markets to Central American bananas. Why
should they? (I only keep track of the dispute because I have to update my
textbook, which includes the sentence: "Efforts to resolve Europe's banana
split have proved fruitless.") But Carl Lindner, the corporate raider who now
owns Chiquita Brands, has strong feelings about the issue; and thanks to his
$500,000 in contributions, so does President Clinton. It's not that Clinton
believed that money alone could buy him the election. But money does help, and
any practical politician comes to realize that betraying the public interest on
small issues involves little political cost, because voters lack the individual
incentive to notice.
So what is the solution?
One answer
is to try to change the incentives of politicians, by making it more difficult
for special interests to buy influence. It is easy to be cynical about this,
but the truth is that legal limits on how money can be given do have
considerable effect. To take only the most extreme example: Outright bribes do
not, as far as we can tell, play a big role in determining federal
policies--and who doubts that they would if they were legal? So by all means
let us have campaign-finance reform; but let us not expect too much from
it.
Another answer is to promote civic virtue.
There are those who believe that if only the media would treat the public with
proper respect, people would respond by acting responsibly--that they would
turn away from salacious stories about celebrities and read earnest articles
about the flat-panel-display initiative instead. Well, never mind. But it is
probably true that the quality of politics in America has suffered from the
erosion of public trust in institutions that used to act, to at least some
degree, as watchdogs. Once upon a time a politician had to worry about the
reactions of unions, churches, newspaper editors, even local political bosses,
all of whom had the time and inclination to pay attention to politics beyond
the sound bites. Now we have become an atomized society of individuals who get
their news--if they get it at all--from TV. If anyone has a good idea about how
to bring back the opinion leaders of yore, I am all for it.
Finally, we can try to
remove temptation, by avoiding policy initiatives that make it easy for
politicians to play favorites. This is one reason why some of us cringed when
Ron Brown began taking planeloads of businessmen off on sales trips to China
and so on. Whether or not those trips did any good, or gave the wrong
impression about how foreigners might influence American foreign policy, they
obviously raised the question of who got to be on the plane--and how.
But there is ultimately no
way to make government by the people truly be government for the people. That
is what rat choice teaches, and nobody has yet proved it wrong--even in
theory.
