Examining the economics of voting across the world
Yes, once more I have neglected this for far too long. My long sojurn in India this summer was characterised by its lack of internet access and as such, nothing got posted here. I have some interesting things from the trip to put up soon though. My hope to have had some time this term was unfortunately hugely misguided but it is now the holidays once more and I am going to get writing...watch this space!
In a slight change from my normal rants, I thought I would post a more economics based article this time, on a subject very close to my heart: voter apathy. Beware, it does stray a little too much onto the technical side at times but, hopefully it should have a certain measure of readability. I will post a more personal/political entry on voting in a few days. I originally wrote this for a economics competition where I was constrained by a word limit so I apologise for any abruptness.
Low voter turnout in elections is becoming an ever increasing problem. Voter apathy often leads to greater problems with governance. If voters are apathetic and uninterested in the results then it can be argued that they will fail to scrutinise their elected representatives’ performances’, therefore allowing a relatively high level of government failure. In the 2001 UK elections the percentage of the voting age population that actually voted was 57.6%. In Niger’s 2004 presidential elections the turnout was 45.0%.[1] Niger is the least developed country and the UK is 17th most developed country.[2] Therefore we can see this problem spans the world.
[1] Figures obtained from the International Institute for Democracy and Electoral Assistance (IDEA)
[2] The UN’s Human Development Index table, Human Development Report 2006
[3] A. Hirschmann, Exit, Voice and Loyalty, 1970, Cambridge University Press
[4] Referring to a voter who has remained uniformed but due to personal satisfaction still votes.
[5] P. Funk, Modern Voting Tools, Social Incentives and Voter Turnout: Theory and Evidence, 2006
[6] Those educated to a tertiary level.
[7] United Nations Development Programme Report 2006
[8] IDEA, ibid
[9] voter rate of 94.3%, 2004 elections, IDEA, ibid
[10] M.N. Franklin, Electoral Engineering and Cross National Turnout Differences, British Journal of Political Science, 1999
In a slight change from my normal rants, I thought I would post a more economics based article this time, on a subject very close to my heart: voter apathy. Beware, it does stray a little too much onto the technical side at times but, hopefully it should have a certain measure of readability. I will post a more personal/political entry on voting in a few days. I originally wrote this for a economics competition where I was constrained by a word limit so I apologise for any abruptness.
Low voter turnout in elections is becoming an ever increasing problem. Voter apathy often leads to greater problems with governance. If voters are apathetic and uninterested in the results then it can be argued that they will fail to scrutinise their elected representatives’ performances’, therefore allowing a relatively high level of government failure. In the 2001 UK elections the percentage of the voting age population that actually voted was 57.6%. In Niger’s 2004 presidential elections the turnout was 45.0%.[1] Niger is the least developed country and the UK is 17th most developed country.[2] Therefore we can see this problem spans the world.
One method of considering voter apathy is to consider voting as a public good. Public choice analysis of electoral participation is based on the behaviour of homo economicus. According to Brennan and Lomasky (1993) homo economicus is self interested and instrumental and therefore considers only his own personal costs and benefits when making a decision. Homo economicus chooses to be rationally ignorant, they will only pursue information if the benefits exceeds their costs. There is little or no incentive to vote in national elections.
The basic formula for determining whether someone will vote is PB + D > C. P is the probability that an individual's vote will affect the outcome of an election, and B is the perceived personal benefit of that person's favored political party or candidate being elected. D represents any social or personal gratification an individual gets from voting. C represents the personal costs involved (normally the time, effort and financial cost incurred). As the probability (P) of your vote being decisive in the election is close to 0, PB is also near zero, and the personal benefits (D) are therefore the most important element in motivating people to vote. For a person to vote, these factors must outweigh C. and normally the costs of participating ensure that the net expected utility from voting is negative. Studies using game theory, which takes into account the ability of voters to interact, have also found that the expected turnout for any large election should be zero.
However the decision not to vote conflicts with social interest. While one person may not vote, they wish others to do so. As any public good, voting can also be considered as a victim of the ‘free rider’ effect. People decide not to expend time on becoming informed and therefore may take the decision not to vote as they would not know who or what policies to vote for. However, they wish everyone else to vote and take the time to become informed. If they do then it can be considered that the “right” thing will occur. These are external effects. As others become more informed everyone becomes better off. This benefits both the more informed people (private benefits) and everyone else (external benefits). It is impossible to exclude people who do not become informed and do not vote from the benefits gained from voting, a working democratic system, this matches the non excludability characteristic of a public good. Therefore there is an incentive not to vote, others will. Of course, if everyone did this then the system would break down.
The problem is some people do vote. If they acted purely like homo economicus no one would vote. This can be explained by examining the different benefits people experience from voting. Some people experience personal pleasure from voting and enjoy the perusal of knowledge required to make a rational, informed decision on whom to vote for. They are able to satisfy their intellectual curiosity and so voting has a high consumption benefit for them. Many people also experience satisfaction when they vote, it shows they have a sense of civic responsibility. It is also a method through which people may have their views heard. This brings us to the concept of ‘voice’.[3] It is the ability of consumers to express their preferences for public services through an administrative mechanism, in this case electoral voting.
The efficacy of ‘voice’ has been inhibited within municipal affairs, as electoral voting has become less highly regarded in society. ‘Legal and institutional barriers’ have been created, eg inadequate public hearings. People see that these are ineffective and so become less inclined to use ‘voice’ or indeed, their vote as they feel the effect will be limited. ‘Information asymmetries’ have, in some ways, become more common. Public bureaucrats have a wider knowledge of public affairs than the citizens. It can be argued that it is easier to find information now than in the past. The rise of the internet and the Freedom of Information Act (in the UK), have meant that people have more means available to them if they wish to find out particular information. However, it is time consuming and often arduous, and people often value their time at a higher cost than they do the information (therefore making the decision based on their personal costs and benefits). Lastly, and importantly, in an area where service provision is highly differentiated (eg in state education) citizens are more likely to use their voice but also are more likely to only influence their local provision (eg their local secondary school.) It is also hard for people to judge how good their provision is; often with public goods people will never be satisfied with the level provision. However, the greater people perceive the relative importance of a good the more important voice is in addressing government failure. Voting as a use of ‘voice’ under a democratic system is hugely important, it is the way in which people choose their representatives and show their feelings about particular policies. However, with the rise of alternative methods to formal voting, examples include opinion polls, protest meetings and opinion shows, voting is considered less significant now than previously. People feel they can give their opinion and views in many different ways and therefore don’t need to vote. However, it is undeniable that many still do. Economists feel that one of the reasons people do still vote is partly because the personal costs involved in voting are relatively low, the energy that is required to be expended is minimal[4] and there are many different methods through which it is possible to vote.
One of the things economists have looked at is how, once people have got to the voting booth, they make their decision. The answer appears to lie in ‘expressive voting’. This is related to people wanting to use their ‘voice’. No one’s vote is likely to be decisive but people still wish to express their support or disapproval. Although the public are aware of how little their vote is likely to affect the outcome of the election they gain expressive satisfaction from voting. People are more likely to support causes that serve the public when the cost is low. To vote in the public interest is cheap, your vote will not be decisive and so if a policy passes and costs you £50, it would have passed anyway and at least this way you get the expressive satisfaction for doing the “right” thing.
So we have examined why people vote, and how they make their decisions, can economics also work out how to get more people to vote?
One of the most common methods economists use to influence peoples’ behaviour is the use of incentives and disincentives. Incentives can include: minimising the personal costs involved, providing a cash incentive to vote or the use of social pressures. Economists have tried many of these, probably the most well know of these are the promotion of alternative voting methods, for example postal and internet voting. However, while these make the voting costs lower, they do not seem to have made turnout higher. [5] A cash incentive seems like a viable solution but raises moral issues. These are generally related to people’s fears that this is too close to the world of bribery in politics and it feels as if someone is buying their vote. Social pressures are the hardest to create and the hardest to measure, but it can be suggested that the answer to low voter turnout lies in education. Greater education increases our interest in politics and our desire to express our views on issues, and as a result, voting turnout amongst educated people [6] in western society tends to be considerably higher. So could education be the answer? It is possible, Iceland has a 99.9%[7] literacy rate and a voting turnout of 87.7%[8] (as measured at the 2003 elections). Niger has one of the lowest literacy rates and has a voting turnout of 44.7% (2004 elections). It is possible that this evidence is purely anecdotal and coincidental, only a long term study looking at the correlation between improving education and voter turnout would be able to say for sure. However, it seems likely.
Of course, the countries with the highest voting rates remain those with enforced compulsory voting, like Australia[9]. It is left to the countries themselves and the citizens whether they wish this to be the case. It is also true that many economists and political scientists believe that low voter turnout is a desirable thing to have.[10] Low voter turnout acts as a self selection tool. It is those with the greatest political interest, greatest knowledge of politics (those who have chosen not to become rationally ignorant) and those with the greatest level of education who end up voting. This could be argued to cause a greater stability of governmental system and also promote a more rigorous eye to be kept on lawmakers whose policies will be more closely scrutinised.
The basic formula for determining whether someone will vote is PB + D > C. P is the probability that an individual's vote will affect the outcome of an election, and B is the perceived personal benefit of that person's favored political party or candidate being elected. D represents any social or personal gratification an individual gets from voting. C represents the personal costs involved (normally the time, effort and financial cost incurred). As the probability (P) of your vote being decisive in the election is close to 0, PB is also near zero, and the personal benefits (D) are therefore the most important element in motivating people to vote. For a person to vote, these factors must outweigh C. and normally the costs of participating ensure that the net expected utility from voting is negative. Studies using game theory, which takes into account the ability of voters to interact, have also found that the expected turnout for any large election should be zero.
However the decision not to vote conflicts with social interest. While one person may not vote, they wish others to do so. As any public good, voting can also be considered as a victim of the ‘free rider’ effect. People decide not to expend time on becoming informed and therefore may take the decision not to vote as they would not know who or what policies to vote for. However, they wish everyone else to vote and take the time to become informed. If they do then it can be considered that the “right” thing will occur. These are external effects. As others become more informed everyone becomes better off. This benefits both the more informed people (private benefits) and everyone else (external benefits). It is impossible to exclude people who do not become informed and do not vote from the benefits gained from voting, a working democratic system, this matches the non excludability characteristic of a public good. Therefore there is an incentive not to vote, others will. Of course, if everyone did this then the system would break down.
The problem is some people do vote. If they acted purely like homo economicus no one would vote. This can be explained by examining the different benefits people experience from voting. Some people experience personal pleasure from voting and enjoy the perusal of knowledge required to make a rational, informed decision on whom to vote for. They are able to satisfy their intellectual curiosity and so voting has a high consumption benefit for them. Many people also experience satisfaction when they vote, it shows they have a sense of civic responsibility. It is also a method through which people may have their views heard. This brings us to the concept of ‘voice’.[3] It is the ability of consumers to express their preferences for public services through an administrative mechanism, in this case electoral voting.
The efficacy of ‘voice’ has been inhibited within municipal affairs, as electoral voting has become less highly regarded in society. ‘Legal and institutional barriers’ have been created, eg inadequate public hearings. People see that these are ineffective and so become less inclined to use ‘voice’ or indeed, their vote as they feel the effect will be limited. ‘Information asymmetries’ have, in some ways, become more common. Public bureaucrats have a wider knowledge of public affairs than the citizens. It can be argued that it is easier to find information now than in the past. The rise of the internet and the Freedom of Information Act (in the UK), have meant that people have more means available to them if they wish to find out particular information. However, it is time consuming and often arduous, and people often value their time at a higher cost than they do the information (therefore making the decision based on their personal costs and benefits). Lastly, and importantly, in an area where service provision is highly differentiated (eg in state education) citizens are more likely to use their voice but also are more likely to only influence their local provision (eg their local secondary school.) It is also hard for people to judge how good their provision is; often with public goods people will never be satisfied with the level provision. However, the greater people perceive the relative importance of a good the more important voice is in addressing government failure. Voting as a use of ‘voice’ under a democratic system is hugely important, it is the way in which people choose their representatives and show their feelings about particular policies. However, with the rise of alternative methods to formal voting, examples include opinion polls, protest meetings and opinion shows, voting is considered less significant now than previously. People feel they can give their opinion and views in many different ways and therefore don’t need to vote. However, it is undeniable that many still do. Economists feel that one of the reasons people do still vote is partly because the personal costs involved in voting are relatively low, the energy that is required to be expended is minimal[4] and there are many different methods through which it is possible to vote.
One of the things economists have looked at is how, once people have got to the voting booth, they make their decision. The answer appears to lie in ‘expressive voting’. This is related to people wanting to use their ‘voice’. No one’s vote is likely to be decisive but people still wish to express their support or disapproval. Although the public are aware of how little their vote is likely to affect the outcome of the election they gain expressive satisfaction from voting. People are more likely to support causes that serve the public when the cost is low. To vote in the public interest is cheap, your vote will not be decisive and so if a policy passes and costs you £50, it would have passed anyway and at least this way you get the expressive satisfaction for doing the “right” thing.
So we have examined why people vote, and how they make their decisions, can economics also work out how to get more people to vote?
One of the most common methods economists use to influence peoples’ behaviour is the use of incentives and disincentives. Incentives can include: minimising the personal costs involved, providing a cash incentive to vote or the use of social pressures. Economists have tried many of these, probably the most well know of these are the promotion of alternative voting methods, for example postal and internet voting. However, while these make the voting costs lower, they do not seem to have made turnout higher. [5] A cash incentive seems like a viable solution but raises moral issues. These are generally related to people’s fears that this is too close to the world of bribery in politics and it feels as if someone is buying their vote. Social pressures are the hardest to create and the hardest to measure, but it can be suggested that the answer to low voter turnout lies in education. Greater education increases our interest in politics and our desire to express our views on issues, and as a result, voting turnout amongst educated people [6] in western society tends to be considerably higher. So could education be the answer? It is possible, Iceland has a 99.9%[7] literacy rate and a voting turnout of 87.7%[8] (as measured at the 2003 elections). Niger has one of the lowest literacy rates and has a voting turnout of 44.7% (2004 elections). It is possible that this evidence is purely anecdotal and coincidental, only a long term study looking at the correlation between improving education and voter turnout would be able to say for sure. However, it seems likely.
Of course, the countries with the highest voting rates remain those with enforced compulsory voting, like Australia[9]. It is left to the countries themselves and the citizens whether they wish this to be the case. It is also true that many economists and political scientists believe that low voter turnout is a desirable thing to have.[10] Low voter turnout acts as a self selection tool. It is those with the greatest political interest, greatest knowledge of politics (those who have chosen not to become rationally ignorant) and those with the greatest level of education who end up voting. This could be argued to cause a greater stability of governmental system and also promote a more rigorous eye to be kept on lawmakers whose policies will be more closely scrutinised.
[1] Figures obtained from the International Institute for Democracy and Electoral Assistance (IDEA)
[2] The UN’s Human Development Index table, Human Development Report 2006
[3] A. Hirschmann, Exit, Voice and Loyalty, 1970, Cambridge University Press
[4] Referring to a voter who has remained uniformed but due to personal satisfaction still votes.
[5] P. Funk, Modern Voting Tools, Social Incentives and Voter Turnout: Theory and Evidence, 2006
[6] Those educated to a tertiary level.
[7] United Nations Development Programme Report 2006
[8] IDEA, ibid
[9] voter rate of 94.3%, 2004 elections, IDEA, ibid
[10] M.N. Franklin, Electoral Engineering and Cross National Turnout Differences, British Journal of Political Science, 1999
Labels: economics, international, voter apathy
posted by The Young Contrarian at 9:21 pm
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