Votes and Outcomes: Rethinking the Politics-Like-Markets Metaphor
- Author(s): Francesco Parisi
- Date Posted: 2001
- Law & Economics #: 01-26
- Availability: Full text (most recent) on SSRN
Democracy gives equal weight to all votes regardless of how strongly voters feel about an issue. Consequently, numerically equal groups have an equal political say in the process. However, if the distribution of sentiments on an issue is asymmetrical, and the minority holds strong preferences, the outcome would be inefficient. By introducing the possibility of bargaining and vote-trading in the process, the intensity of preferences will be eflected in the decision-making process. With bargaining and side-payments, the "one man, one vote" rule would provide the initial entitlement for each voter-trader. The exchange mechanism would then reveal the relative strength of individual preferences. Political bargaining may provide a solution to the intensity problem, while at the same time correcting the cyclicality problem.
Logrolling and political bargaining in many ways increase the internal predictability of the outcome for those who are involved in the process and are fully informed of it. Logrolling allows for bargaining and political exchange to foster stable political arrangements. To the extent to which political exchange is supported by enforcement mechanisms (e.g., reputation of political players, etc.) legislators sharing similar information on their respective prospects will have an opportunity to bargain under conditions of symmetric information, trading votes for issues on which they hold weak preferences in exchange for votes on issues which they more highly value. Economic theory teaches us that bargaining between politicians will continue until the marginal utility of gaining one vote on a certain issue equals the marginal cost of giving up one vote for another issue. The outcome selected by majorities in such an environment of costless and enforceable political bargaining improves the combined welfare of the platforms.
These considerations will hopefully facilitate the assessment of the normative implications of the "commodification" of political consensus. While certainly corroding some of the aspirational and expressive qualities of the political system, logrolling would ensure a greater opportunity for cardinal preferences to be captured in political decisions-making.