Posted by Ilya Somin:
Why Voters Reward Lucky Governments More than Good Ones:
http://volokh.com/archives/archive_2009_06_21-2009_06_27.shtml#1246037770
Some scholars who discount the dangers of [1]widespread political
ignorance argue that voters don't really need to know much to make
good decisions. They can simply reward incumbents who do well and
punish those who perform poorly - an approach known as "retrospective
voting." Unfortunately, effective retrospective voting requires
citizens to be able to tell the difference between conditions caused
by incumbents' policies and those that merely happened to occur on
their watch without any such causal connections.[2] Tim Horford
summarizes [3]a recent study by Australian economist Andrew Leigh
which shows that voters generally can't do this [HT: [4]Bryan Caplan]:
The question is, can the voters tell the difference between an
incompetent government and an unlucky one? Andrew Leigh, an
economist at Australian National University, thinks not. In a
recent article in the Oxford Bulletin of Economics and Statistics,
he looks at 268 elections held across the world between 1978 and
1999. He estimates how much of a country's economic performance is
due to booms in the world economy and how much is due to competent
government - and whether the voters can tell the difference.
Both matter, but as far as the voters are concerned, it is better
to be a lucky government than a skilful one. For instance, a
one-percentage point increase in world economic growth above the
norm is associated with a hefty rise in the chance that incumbents
will be re-elected - from the typical chance of 57 per cent to a
more than decent 64 per cent. A stellar domestic performance,
outpacing world growth by one percentage point, contributes less
than half as much to the chances of being re-elected, raising them
from 57 to 60 per cent.
These results may actually overstate the voters' knowledge. Short term
growth rates higher than those of the world economy are also often due
to luck. For example, Vladimir Putin reaped enormous political
benefits from Russia's strong growth earlier in this decade - despite
the fact that the growth was mostly due to a rapid increase in world
demand for oil that Putin had done nothing to cause (just as he also
didn't create Russia's large oil deposits). Ultimately, the effects of
government competence are swamped by those of luck because the latter
has much larger effects on short term swings in economic conditions -
even though [5]good policies have a major influence on long-run growth
rates, which are far more important. Unfortunately, as Princeton
political scientist [6]Larry Bartels notes, most voters tend to focus
inordinately on very recent economic events, discounting more
significant longer term trends.
Leigh's study merely reinforces the conclusions of previous research
on retrospective voting, which shows that voters routinely punish
incumbents for bad events they didn't cause and could not prevent,
including [7]shark attacks and droughts.
A related danger of flawed retrospective voting is that it might lead
voters to punish flawed incumbents by electing opposition parties that
are much worse. The most famous example is the reaction of German
voters to the Great Depression, which was blamed on the mainstream
parties of the Weimar Republic. This led to electoral successes for
the Nazis and (to a lesser extent) Communists, with horrible
consequences for both Germany and the world. In recent years, poor
economic performance and rising crime rates in Western Europe has led
many voters to support parties on the socialist far left and
nationalist far right; to put it mildly, either of these factions'
policies are likely to make Europe's problems worse rather than
better.
I describe several other shortcomings of retrospective voting in Part
III of [8]this paper.
As Horford emphasizes, flawed retrospective voting is part and parcel
of the more general problem of the public's [9]rational political
ignorance. Voters have little or no incentive to do the hard work of
separating out outcomes that really are the result of incumbents'
policies from those that are due to factors beyond their control:
Why are voters so wretchedly ungrateful? The common-sense answer is
that it is not easy to distinguish a lucky government from a
skilful one. In addition � and this point is less obvious � an
individual voter has little incentive to do so. We all know that
elections are almost never decided by a single vote, and so each
voter would be right to conclude that her vote is highly unlikely
to make a difference....
And if the result does not depend on any particular one of us,
trying to disentangle luck from skill by ploughing through the
latest reports from the International Monetary Fund is likely to
remain a minority hobby.
References
1.
http://www.google.com/url?sa=t&source=web&ct=res&cd=1&url=http%3A%2F%2Fwww.cato.org%2Fpub_display.php%3Fpub_id%3D2372&ei=awBFSoWRIuGJtge-gvzaAw&rct=j&q=ilya+somin+%2B+ignorance+%2B+bliss&usg=AFQjCNHzDVpYNleVLC8wW70fwSl0nqnN0Q
2. http://www.ft.com/cms/s/2/3a6f0e70-5a11-11de-b687-00144feabdc0.html
3.
http://econpapers.repec.org/article/blaobuest/v_3a71_3ay_3a2009_3ai_3a2_3ap_3a163-181.htm
4. http://econlog.econlib.org/archives/2009/06/retrospective_v.html
5.
http://www.growthology.org/growthology/2009/06/the-facts-of-growth-not-a-mystery.html
6. http://www.princeton.edu/~bartels/how_stupid.pdf
7. http://www.international.ucla.edu/media/files/PERG.Achen.pdf
8. http://www.cato.org/pubs/pas/pa525.pdf
9. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=916963
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