15.3 Political economy and voting systems

Political economy and voting systems are crucial in shaping democratic outcomes. These systems influence how citizens' preferences translate into policy decisions and who gets elected. Understanding their mechanics helps us grasp why politicians behave the way they do.

From the median voter theorem to paradoxes like Arrow's impossibility theorem, voting systems have inherent flaws. Strategic behavior, including gerrymandering and lobbying, further complicates the process. These factors can lead to outcomes that don't always reflect the true will of the people.

Voting Systems and Paradoxes

Median Voter Theorem and Its Implications

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• Median voter theorem states in a majority rule voting system, the candidate or policy position closest to the median voter's preferences will win the election
• Assumes voters have single-peaked preferences along a one-dimensional spectrum (left-right political spectrum)
• Implies political candidates or parties will converge towards the center of the political spectrum to appeal to the median voter and maximize their chances of winning
• Can lead to moderation of policies and a lack of representation for voters with more extreme preferences on either end of the spectrum

Paradoxes and Limitations of Voting Systems

• Arrow's impossibility theorem proves no voting system can satisfy a set of reasonable criteria for fair decision-making simultaneously when there are three or more distinct alternatives
  • Criteria include transitivity, independence of irrelevant alternatives, non-dictatorship, and Pareto efficiency
• Condorcet paradox demonstrates how collective preferences can be intransitive (A > B, B > C, but C > A) even if individual voters have transitive preferences
  • Occurs when there is no clear majority winner and the outcome depends on the voting procedure used
• Plurality voting, where the candidate with the most votes wins regardless of whether they have a majority, can lead to the spoiler effect and the election of a less preferred candidate
  • Spoiler effect happens when a third-party candidate takes votes away from a major party candidate, causing them to lose (Nader in 2000 US presidential election)
• Proportional representation systems aim to allocate seats in a legislature proportionally to the vote share each party receives, providing better representation for minority groups and diverse preferences
  • Can lead to coalition governments and a need for compromise among multiple parties to form a governing majority (Germany, Israel)

Strategic Behavior in Politics

Voting Strategies and Their Consequences

• Strategic voting occurs when voters cast ballots for candidates other than their sincere first choice to influence the outcome in their favor
  • Voting for a more electable second-choice candidate to prevent a disliked candidate from winning (voting for Biden to prevent Trump victory in 2020)
• Lobbying involves interest groups attempting to influence policy decisions by providing information, campaign contributions, or other incentives to politicians
  • Can lead to policies that benefit narrow special interests at the expense of the general public (agricultural subsidies, tax loopholes)
• Rent-seeking refers to the use of resources to capture economic rents (profits above normal market levels) through political influence rather than productive activity
  • Lobbying for regulations that limit competition, securing government contracts, or obtaining subsidies are forms of rent-seeking that can lead to economic inefficiency

Manipulating Electoral Outcomes

• Gerrymandering is the manipulation of electoral district boundaries to favor one party or group over others
  • Can be used to concentrate opposition voters into a few districts or disperse them across many to dilute their voting power (packing and cracking)
  • Leads to disproportionate representation and can insulate incumbents from electoral competition
  • Advances in data analytics and computer modeling have made gerrymandering more precise and effective (REDMAP project in 2010 US redistricting)
• Strategic candidate entry and exit can shape the field of candidates and the eventual outcome
  • A party may encourage multiple candidates to run in a primary to split the vote and prevent a less preferred candidate from winning
  • Candidates may strategically drop out and endorse another to consolidate support behind a frontrunner (Democratic primary dropouts and Biden endorsements in 2020)