Bryan Caplan  

Why Not Make Politics a Real Popularity Contest?

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Politicians in a democracy face truly crummy incentives: No matter how good or bad their performance, they receive the same salary. What would we expect from a CEO who faced the same reward structure?

As soon as you start talking about paying politicians for performance, however, people start asking: "How would you measure 'performance?'" GDP? GDP+? Average national happiness? Peace? Number of enemies defeated?? Global temperature???

Well, I've got a simple solution. Personally, I don't like it; but I don't see why most people wouldn't. The solution is... [drum roll]:

Pay politicians for approval ratings.

This allows the public itself to decide how much to count anything it pleases. The only tough question is how long to keep paying. If you think politicians frequently sacrifice long-run benefits for short-run gains, you can take the profit out of myopia by continuing to pay after the politician leaves office. If a president's influence fades out after five years, keep conducting approval polls for five years, and keep sending the ex-president his paychecks.

With rational voters, this seems like an elegant solution to many of the political principal-agent problems explored in books like Tim Besley's Principled Agents? My problem with my proposal, as you might guess, is that I think voters are so irrational that the correlation between actual performance and popular approval might well be negative. But obviously I'm in a minority here.

So tell me: If you trust the people, why not pay politicians for approval? If you think that politicians respond to incentives, why not pay billions for an extra percentage point of approval? In fact, even if politicians don't change their behavior in response to incentives, there's still a big benefit to big bonuses: Potential candidates who reasonably expect high approval will be more inclined to run and try harder to win.

Final challenge: Is there any reason to prefer the incentive of re-election to the incentive of payments for approval ratings?

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COMMENTS (9 to date)
Troy Camplin writes:

Combine this with the ancient Greek practice of Ostracism and holding politicians financially responsible for the negative outcomes of the bills they vote for, and I'm on board.

Maniakes writes:

Implement it through the income tax system. Next to the little check box that lets you earmark $3 for public financing of campaigns, add a box allowing you to earmark a one dollar bonus to the current President, and another with a one dollar bonus for the previous President.

Dr. T writes:

I agree that the general public will reward politicians for bad decisions/actions and penalize them for good ones. This type of situation occurs even among the supposed elite.

When I taught gastroenterology at a university medical center, the medical students gave me the second-lowest rating of all faculty. They gave the highest rating to a neurosciences teacher. However, when the National Board of Medical Examiner scores came back, gastroenterology was one of the few subjects in which our students scored higher than the national average. The students scored far below average in the neuroscience section. Publications from other medical centers all show an inverse correlation between medical student evaluations of faculty and performance on board exams.

I'm glad my salary wasn't based on my popularity with the students. I would not have minded if my salary had been based on my popularity among the top 10% of the students. This example partly explains why I dislike democracy and would prefer a true meritocracy.

drew writes:

This strikes me as a rephrasing of a straight democracy. The reasoning against it would be the same: issues would be based purely on public passions, unprincipled. It it would encourage more group related balkanization, leaving politicians more at the whim of specifically interested parties. This seems like an extension of the 17th Amendment, section 1.

Rather than a CEO who faces the same reward structure, it would more closely resemble a socialist leader who takes over industries. CEO's are responsible to shareholders who can opt-out by selling, but who can voluntarily wait out slow periods.

Rue Des Quatre Vents writes:

Let me play devil's advocate here.

There are some things that money should not touch; a la Michael Walzer, there are spheres of justice, and what applies in one sphere, say the market, should not apply in other, say the family. One such place is the realm of political discourse. Such places ought not to be corrupted by money and high-priced management, mainly because this is the sphere where we elevate ourselves with discussion about what really matters in life, what we morally ought to do for the common good. Such discourse exercises our faculties in a way that is higher and better than those used in such base things as commerce. Accordingly, we should protect such a place from market-influences, just as would the family. We don't pay our kids by how much they amuse us, do we? Or how much they make us feel proud? We don't give money to our wife for loving us, do we? It's because it is only without money that we can properly exercise these capacities as lover, as husband, as father. Likewise, it is only with a political sphere free of money that we can deliberate about the good to attain civic virtue.

DJH writes:

All other considerations aside, this is clearly an insipid concept in the first place since there is little reason to believe salary is the primary compensation for a politician.

John Fast writes:

I'm strongly in favor of pay-for-performance. Right now the President's salary is $400,000. I'd favor replacing that with a salary of $8,000 times his percentage approval rating.

Of course what would be even better would be to measure performance in something even more worthwhile than popularity, such as GDP/capita, or disposable income per capita. Or use a specific, quantified "quality of life index" which adds life expectancy, education, the crime rate, and the environment. I have no problem adding the Gini coefficient as well, as a penalty against disposable income per capita.

Biomed Tim writes:

Dr. T,

Board scores aren't necessarily a good measure of teacher performance. You and I both know that students spend so much time studying on their own anyway.

Ross Levatter writes:

Biomed Tim,

I think you miss Dr. T's point: Of course medical students study all the time. Why do you think they study more in gastroenterology than in neurosciences? Dr. T wasn't claiming that his students did well ONLY because of him; he was claiming their dislike of his course was not a good measure of his competence in teaching the course. Your comment would make sense only if you think there is NO correlation between a teacher's effectiveness and standardized tests of the material taught.

Dr. L.

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