Why we vote the way we do? - Economics of Politics

ABSTRACT 

Did this thought ever strike your mind what calculations your mind is doing before choosing the  prospective candidate for the potential incumbent? As you stand in the voting booth,bombarded with political parties campaigns and slogans,where do you find your choice being affected by them? Are their opinions and policies, character and past actions, and how well you believe they will represent your interests and values all contribute to your decision-making process?  Why do infamous candidates get elected even  though there might be other better individuals? The public choice theory aims to answer all these  questions. It is an interdisciplinary approach that acts as a center of economics and politics. It  explains how public decisions are largely influenced by the interaction between the voting  public, politicians, bureaucracies, and political action committees. While controversial,  understanding this theory would facilitate the readers in developing a realistic approach to democracy and its dysfunctional politics. ` 

INTRODUCTION 

Public choice uses similar principles as economists use while analyzing the market, that people are mainly guided by self-interest. They are rational and make decisions that maximize their utility. A similar assumption is made by public choice economists, people vote based on  what is suitable for them, and it includes all voters, politicians, lobbyists, or bureaucrats. As said  by James Buchanan, it is ‘politics without romance’, it displaced the wishful thinking that  participants in the political sphere work for the common good. 

THE IRRATIONAL MINDSET OF VOTERS 

A report by BBC stated that three-quarter of people could not name their MP. Why does it  happen even though individuals make rational choices and seek to maximize their utility? The  theory suggests that when it comes to voting, individuals often face a cost-benefit analysis. The  probability of one vote determining the course of the election is infinitesimal, due to which the  cost of voting- taking out time to be informed about the candidates and their track record and  traveling to polling places, is comparatively more. 

Economic rationality dictates that an individual should vote only if the benefits exceed the costs.  Most of the time that isn’t the case. Then why do we vote at all considering the expected gain is  often minimal? Here, psychological factors come into play. Social and cultural norms play a  significant role. A sense of civic duty to vote is felt. On top of it friends, family, and community  expect individuals to participate, so social pressure often compels them to vote 

HOW DO PEOPLE CHOOSE? 

The lack of research done by people to choose a candidate is often evident, so what persuades them to  vote for one candidate over the other? The theory suggests that in an election involving two  candidates, voters are compelled to choose the ‘lesser evil’. This is known as strategic voting  strategy and is often necessary in cases where the greater evil candidate has a high probability of  winning. However, In a multi-candidate race, the decision-making process becomes more  complex. The biases of an individual heavily influence the choices. A candidate possessing a  charismatic personality would be preferred over the other one. Reliance on mental shortcuts, for  example voting for incumbents or candidates at the top of the ballot and proneness to confirmation bias is pursued too which makes one choose from the two front runners even  though there are multiple candidates. 

GOVERNMENT PURSUES PUBLIC WELFARE- IS IT TRUE? 

It is generally expected from politicians and bureaucrats to act in the best interest of the general  public. However, the theory argues that politicians and bureaucrats may act in self-interested ways, similar to individuals and businesses in a free market. Incentives received for working for  public welfare are weak. A politician may intend to spend the tax and other funds wisely but it  will neither save his own money nor increase his wealth from the money saved. Virtually there is  no reward for efficient decision-making and to extend benefits to the public who is mostly  unaware of the benefits or of who conferred them. In such a scenario politicians will propose  policies that appeal to floating voters rather than the benefit of the society as a whole because of  the incentive of getting re-elected. Bureaucrats captured by special interest groups lobby for  increased funding and influence policies for their promotion and well-being, even if it is not  necessarily efficient. Public choice theory highlights the drawback of simply setting up  government organisations, ignoring the self-interests of politicians leading to an open room for  potential corrupt behavior. In other words, legislators have the power to tax and extract resources  but the public monitors their behavior poorly they act in a way that benefits them primarily, not  the general public. 

HOW DO THEY GAIN VOTES: MEDIAN VOTER THEOREM 

How does a candidate try to win elections and beat his competitors? Harold Hoteling, an  American mathematical statistician developed a spatial economic competition model which  provides valuable insights into political competition. The median voter model states that the one  closest to the center, or someone who is in the middle of the ideological spectrum, would have  more chances to win. For instance, suppose A makes a proposal that will cost $800, B proposes  another project that costs $500, and C champions a proposal that costs $600. When presented  with $800 and $500 projects for A, B, and C, A and C will stick to their projects. However, as B  voted for a $500 project, he would be more likely to choose the project presented by C since its  cost is closer to his own. In another situation, when $800 and $500, A and B will choose their  project, but C would vote for B’s project because its cost is closest to his favored project. Hence  a conclusion can be derived that the project with the middling cost is the one selected. Such a pattern can be observed in political competition as well, which is why candidates may moderate  or change their policy positions to appeal to the median voter.  

THE PROBLEM  

Public choice theory, like every other theory, is not free from certain limitations. Several  problems surround public choice theory. One, it fails to explain why people vote and their  changes in voting behavior, or the actual votes of people.Public choice theory often assumes that people always act in their own rational self-interest. However, this assumption may not fully capture how people make decisions. Sometimes, people act in ways that benefit others, even if it costs them something. This is called altruistic behavior. Traditional public choice models don’t fully account for altruistic behavior, so they may not always be able to explain how people make decisions. Second, it cannot help us understand  what kind of people run the public offices, and why candidates run for office posts. Third, the  prospering results of government functioning counters the claims of public choice theory. However, the theory provides us with the most realistic view of the political landscape.Keeping in mind the theory as the base,solutions to its limitations can be developed.To understand altruistic behavior better, researchers can integrate principles from behavioral economics and psychology. Recognizing the influence of emotions, social norms, and moral considerations in decision-making leads to more detailed models representing diverse human motivations. Public choice theory should move beyond solely concentrating on individual incentives and adopt a multidimensional perspective that considers broader factors in political dynamics. This includes considering the role of ideology, social identity, cultural norms, and institutional design. To more accurately understand political behavior and decision-making, researchers should focus on the distribution of power and influence within political systems. Ignoring factors like interest groups, lobbying, and institutional arrangements leads to unrealistic models. Recognizing power imbalances allows for more realistic models.

CONCLUSION 

Public choice theory has emerged as a valuable framework for understanding the decision making processes in the public sphere. While it has its fair share of critics, the interesting lens it provides to view politics and the democratic process. One key conclusion that can be derived  from the public choice is that people who hold coveted positions will not produce major changes  in the policy outcomes, it’s the opinion of the median voter. Moreover, electing better people will not automatically lead  to a much better government. Adopting the assumption of being guided  by the mechanism of self-interest, public choice states that men are not angels and under the veil  of institutional reforms, they pursue their benefits. When one heads to the polls, one chooses a  candidate not solely based on their charisma, but chooses a person who will conform to an  individual’s interests. Politicians then implement policies and shape legislation to get re-elected,  not necessarily for the society’s well being. Ultimately, by fostering greater transparency, accountability, public participation and development of sound behavioral models complementing the theory we can empower individuals to make informed decisions and actively participate in the electoral process, thus contributing to a more responsive and inclusive democracy.

Resources 

https://thismatter.com/economics/public-choice-theory.html https://www.studysmarter.co.uk/explanations/microeconomics/political economy/median-voter-theorem/ 

https://www.econlib.org/library/Enc1/PublicChoiceTheory.html#:~:text=Public%20choice%20takes%20the%20same,motivated%20mainly%20by%20self%2Dintere st. 

https://www.econlib.org/library/Enc/PublicChoice.html#:~:text=Public%20choice%2C%20in%20other%20words,the%20fundamental%20unit%20of%20analysis.

By Priyanshi Dhamija