Voters express preferences through elections
Special interest groups provide additional information and advocacy for lawmaking
Politicians create laws reflecting voter and interest group preferences
Bureaucrats implement laws according to goals set by politicians
Judges interpret laws to settle individual disputes
Politicians create laws reflecting voter and interest gorup preferences
The politician's problem:
Choose: < a platform >
In order to maximize: < votes >
Subject to: < being re/elected >
How do legislators choose which policies (or bills) to support?
How do legislators interact with each other to produce policy?
How do institutions affect legislative outcomes?
Recall the Median Voter Theorem: politicians are trying to get close to what they believe the median voter wants
Politicians may have their own honest convictions about issues
Tradeoff: honest convictions vs. winning (adopting median voter's preferences)
Rationally ignorant voters pay little attention to actual substance or policy-making; more to TV-friendly spectacles
Big speeches, ribbon cutting ceremonies, attack ads on rivals, etc
Platforms more about broad platitudes than substance "family values," "tough on crime," "change," "drain the swamp" etc.
Special interests pay very close attention and are actively involved in policy-making and contribute to political campaigns
Politicians allocate funds towards special interests
U.S. House of Representatives:
Direct election of all representatives every 2 years
All revenue (tax) bills must start in the House
House votes for President in event of an electoral college tie, has power to impeach
U.S. House of Representatives:
One rep. for each district (of 435), allocated to the 50 States according to population (decennial U.S. Census)
The House at the time has the power to redraw districts
Benefit of cleverly drawing districts: keep incumbent politicians from competing with one another!
Like a market cartel: more profitable for firms to not compete with one another and agree to have exclusive territories
MA Governor Elbridge Gerry redrew districts in 1812 to benefit his party
"Gerrymandering": drawing districts for political benefits
Has been used to both dilute and strengthen the power of political minorities
Also used to create "safe seats" for incumbents
U.S. Senate:
Each U.S. State gets 2 senators
Originally appointed by State legislatures, 17th amendment (1913) changed to direct at-large election
Each term is 6 years, and staggered elections so 13 of the Senate is elected every 2 years
President's federal appointments must obtain "advice and consent" of the Senate
Votes to convict in impeachment trials
Election to Congress involves (1) aggregating individual votes in State (districts) and then (2) taking the majority vote of those districts
Party winning most seats not necessarily the party that wins the most votes
Example: in 2012, Democrats in the U.S. House of Representatives earned 50.59% of the popular vote but only attained 46.21% of the seats
For House races, each State is split into n districts, each electing their own rep.
Suppose within a State 34 of voters like Yellow party and 14 like Green party
Suppose the State has 4 districts, and each district elects a Member
Each Member of Congress represents a geographic district (or State, for Senate)
Special interests are often distributed geographically
The function of each Member is to benefit their district
Voters & special interests with strong geographic concentration tend to flock to those legislators
But how can a legislator get their constituents' agenda passed if they are just 1/435 (or 1/100)?
Recall the (simple) Coase Theorem with low transaction costs and clearly defined property rights, parties can bargain to reach the socially efficient outcome
Does a legislature bargain to reach the efficient outcome?
Consider politics as a market for votes
Imagine two groups:
In theory, 1 can persuade 2 to support A in exchange for some side payment, i.e. 1 buys 2's vote
That transaction would be a Pareto improvement! (Or at least, a Kaldor-Hicks improvement)
Both groups are better off: 1 gets policy A, 2 is compensated by 1
This is the Coase theorem in politics: parties can bargain to a socially efficient outcome
However, in many cases in politics, this less likely to happen because of high transaction costs
How would such a vote contract be enforceable?
Votes in Congress are often publicly recorded
This actually enhances the market for vote trading in Congress
Secret ballots raise transaction costs and prevent agreements or vote trades
"Pork barrel" legislation: law that only benefits a narrow regional interest at taxpayer expense, solely for representative to bring money to their district
This legislation would never pass as a bill on its own!
"Citizens Against Government Waste’s (CAGW) 2019 Congressional Pig Book exposes 282 earmarks, an increase of 21.6 percent from the 232 in fiscal year (FY) 2018. The cost of earmarks in FY 2019 is $15.3 billion, an increase of 4.1 percent from the $14.7 billion in FY 2018. Since FY 1991, CAGW has identified 111,144 earmarks costing $359.8 billion...Over the past two years, legislators added an average of 257 earmarks costing $15 billion."
As in previous years, all items in the Congressional Pig Book meet at least one of CAGW’s seven criteria, but most satisfy at least two: Requested by only one chamber of Congress; Not specifically authorized; Not competitively awarded; Not requested by the President; Greatly exceeds the President’s budget request or the previous year’s funding; Not the subject of congressional hearings; or Serves only a local or special interest.
"You scratch my back, I'll scratch yours"
Senator | Base | Dam | Monument |
---|---|---|---|
A | +10 | -3 | -3 |
B | -3 | +10 | -3 |
C | -3 | -3 | +10 |
D | -3 | -3 | -3 |
E | -3 | -3 | -3 |
TOTAL | -2 | -2 | -2 |
Senator | Base | Dam | Monument |
---|---|---|---|
A | +10 | -3 | -3 |
B | -3 | +10 | -3 |
C | -3 | -3 | +10 |
D | -3 | -3 | -3 |
E | -3 | -3 | -3 |
TOTAL | -2 | -2 | -2 |
Senator | Base | Dam | Monument | COMBINED |
---|---|---|---|---|
A | +10 | -3 | -3 | +4 |
B | -3 | +10 | -3 | +4 |
C | -3 | -3 | +10 | +4 |
D | -3 | -3 | -3 | -9 |
E | -3 | -3 | -3 | -9 |
TOTAL | -2 | -2 | -2 | -6 |
Congress organizes via Congressional Committees
Note: this is not discussed in the U.S. Constitution!
Legislative agenda is a commons, easily congested!
Committees create "property rights" to enclose portions of the agenda to exclusive committees
Voters express preferences through elections
Special interest groups provide additional information and advocacy for lawmaking
Politicians create laws reflecting voter and interest group preferences
Bureaucrats implement laws according to goals set by politicians
Judges interpret laws to settle individual disputes
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Voters express preferences through elections
Special interest groups provide additional information and advocacy for lawmaking
Politicians create laws reflecting voter and interest group preferences
Bureaucrats implement laws according to goals set by politicians
Judges interpret laws to settle individual disputes
Politicians create laws reflecting voter and interest gorup preferences
The politician's problem:
Choose: < a platform >
In order to maximize: < votes >
Subject to: < being re/elected >
How do legislators choose which policies (or bills) to support?
How do legislators interact with each other to produce policy?
How do institutions affect legislative outcomes?
Recall the Median Voter Theorem: politicians are trying to get close to what they believe the median voter wants
Politicians may have their own honest convictions about issues
Tradeoff: honest convictions vs. winning (adopting median voter's preferences)
Rationally ignorant voters pay little attention to actual substance or policy-making; more to TV-friendly spectacles
Big speeches, ribbon cutting ceremonies, attack ads on rivals, etc
Platforms more about broad platitudes than substance "family values," "tough on crime," "change," "drain the swamp" etc.
Special interests pay very close attention and are actively involved in policy-making and contribute to political campaigns
Politicians allocate funds towards special interests
U.S. House of Representatives:
Direct election of all representatives every 2 years
All revenue (tax) bills must start in the House
House votes for President in event of an electoral college tie, has power to impeach
U.S. House of Representatives:
One rep. for each district (of 435), allocated to the 50 States according to population (decennial U.S. Census)
The House at the time has the power to redraw districts
Benefit of cleverly drawing districts: keep incumbent politicians from competing with one another!
Like a market cartel: more profitable for firms to not compete with one another and agree to have exclusive territories
MA Governor Elbridge Gerry redrew districts in 1812 to benefit his party
"Gerrymandering": drawing districts for political benefits
Has been used to both dilute and strengthen the power of political minorities
Also used to create "safe seats" for incumbents
U.S. Senate:
Each U.S. State gets 2 senators
Originally appointed by State legislatures, 17th amendment (1913) changed to direct at-large election
Each term is 6 years, and staggered elections so 13 of the Senate is elected every 2 years
President's federal appointments must obtain "advice and consent" of the Senate
Votes to convict in impeachment trials
Election to Congress involves (1) aggregating individual votes in State (districts) and then (2) taking the majority vote of those districts
Party winning most seats not necessarily the party that wins the most votes
Example: in 2012, Democrats in the U.S. House of Representatives earned 50.59% of the popular vote but only attained 46.21% of the seats
For House races, each State is split into n districts, each electing their own rep.
Suppose within a State 34 of voters like Yellow party and 14 like Green party
Suppose the State has 4 districts, and each district elects a Member
Each Member of Congress represents a geographic district (or State, for Senate)
Special interests are often distributed geographically
The function of each Member is to benefit their district
Voters & special interests with strong geographic concentration tend to flock to those legislators
But how can a legislator get their constituents' agenda passed if they are just 1/435 (or 1/100)?
Recall the (simple) Coase Theorem with low transaction costs and clearly defined property rights, parties can bargain to reach the socially efficient outcome
Does a legislature bargain to reach the efficient outcome?
Consider politics as a market for votes
Imagine two groups:
In theory, 1 can persuade 2 to support A in exchange for some side payment, i.e. 1 buys 2's vote
That transaction would be a Pareto improvement! (Or at least, a Kaldor-Hicks improvement)
Both groups are better off: 1 gets policy A, 2 is compensated by 1
This is the Coase theorem in politics: parties can bargain to a socially efficient outcome
However, in many cases in politics, this less likely to happen because of high transaction costs
How would such a vote contract be enforceable?
Votes in Congress are often publicly recorded
This actually enhances the market for vote trading in Congress
Secret ballots raise transaction costs and prevent agreements or vote trades
"Pork barrel" legislation: law that only benefits a narrow regional interest at taxpayer expense, solely for representative to bring money to their district
This legislation would never pass as a bill on its own!
"Citizens Against Government Waste’s (CAGW) 2019 Congressional Pig Book exposes 282 earmarks, an increase of 21.6 percent from the 232 in fiscal year (FY) 2018. The cost of earmarks in FY 2019 is $15.3 billion, an increase of 4.1 percent from the $14.7 billion in FY 2018. Since FY 1991, CAGW has identified 111,144 earmarks costing $359.8 billion...Over the past two years, legislators added an average of 257 earmarks costing $15 billion."
As in previous years, all items in the Congressional Pig Book meet at least one of CAGW’s seven criteria, but most satisfy at least two: Requested by only one chamber of Congress; Not specifically authorized; Not competitively awarded; Not requested by the President; Greatly exceeds the President’s budget request or the previous year’s funding; Not the subject of congressional hearings; or Serves only a local or special interest.
"You scratch my back, I'll scratch yours"
Senator | Base | Dam | Monument |
---|---|---|---|
A | +10 | -3 | -3 |
B | -3 | +10 | -3 |
C | -3 | -3 | +10 |
D | -3 | -3 | -3 |
E | -3 | -3 | -3 |
TOTAL | -2 | -2 | -2 |
Senator | Base | Dam | Monument |
---|---|---|---|
A | +10 | -3 | -3 |
B | -3 | +10 | -3 |
C | -3 | -3 | +10 |
D | -3 | -3 | -3 |
E | -3 | -3 | -3 |
TOTAL | -2 | -2 | -2 |
Senator | Base | Dam | Monument | COMBINED |
---|---|---|---|---|
A | +10 | -3 | -3 | +4 |
B | -3 | +10 | -3 | +4 |
C | -3 | -3 | +10 | +4 |
D | -3 | -3 | -3 | -9 |
E | -3 | -3 | -3 | -9 |
TOTAL | -2 | -2 | -2 | -6 |
Congress organizes via Congressional Committees
Note: this is not discussed in the U.S. Constitution!
Legislative agenda is a commons, easily congested!
Committees create "property rights" to enclose portions of the agenda to exclusive committees