Bryan Caplan  

Disastrous Voting

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Andrew Healy, my favorite new empirical political economist, has written a bold new paper. You might have thought that disasters were "acts of God," but Healy argues that the American voter is a co-conspirator. From the abstract:

Using comprehensive data on natural disasters, government spending, and election returns, I show that voters reward disaster relief spending but not disaster prevention spending. This aspect of voter behavior creates a large distortion in the incentives that governments face, since the data show that prevention spending substantially reduces future damage.
The paper has some nifty graphs showing the incumbent party's vote share (and change in vote share) as a function of relief and prevention spending. The slope for relief is sharply positive; the slope for prevention is flat. Given these incentives, it's hardly surprising that politicians spend about fifteen times as much on relief (which attracts votes) as they do on prevention (which doesn't).

Of course, if prevention were useless, this would be a pretty good outcome. But Healy presents additional evidence that disaster prevention spending has high returns:

Perhaps voters appreciate the ineptness of government prevention efforts. To consider this possibility, I estimate the effectiveness of government prevention spending...

Given mean annual prevention spending of $195 million and mean disaster damage of $16.5 billion, the regression estimates that a $1 increase in prevention spending resulted in a $8.30 decrease in disaster damage, and this estimate captures only benefits that occur in the five years from 2000-2004.

My main quarrel with this paper is that Healy ends by discussing an exception to the rule that voters don't reward prudent prevention. This might be a valuable topic for a follow-up paper, but it's a shame to dilute the message of the main results: Even when government spending could greatly improve efficiency, it fails to do so. In the hands of rational voters, government is strong medicine for public goods problems. But in the hands of real voters, government is usually a big bottle of snake oil.

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The author at Roth & Company, P.C. in a related article titled DISASTROUS POLITICIANS writes:
    Bryan Caplan tells a sad tale this morning about politicians and us, the voters that enable them: Andrew Healy, my... [Tracked on July 15, 2008 8:21 AM]
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Hopefully Anonymous writes:

great post, thanks for sharing this.

Dan Hill writes:

This is not surprising. There is a general problem with spending on prevention, namely that if successful the event to be prevented never occurs, providing evidence for those who opposed the prevention spending.

A good example is Y2K. It's received wisdom outside the IT industry that all the spending on Y2K was a con by the geeks to rip everyone off. Their evidence? That Y2K problems didn't occur. Occam's Razor would suggest a less complex hypothesis - that the spending on prevention worked. Of course that story won't sell newspapers.

Similarly, there is a consistent bias in Government against maintenance spending. No politician wants to cut a ribbon on a project to repair a bridge (say, I don't know, on 1-34 in Minnesota) when they could cut a ribbon on a shiny new one somewhere. It's even worse in areas like water distribution where the voter's can't even see most of the infrastructure.

Adam writes:

A very interesting paper ideed ... I also agree with your ending caveat. I currently work for a government and we have similarly been trying to plead the case of spending on maintaining the existing stock as opposed to spending on new infrastructure; I see a lot of similarities.

David J. Balan writes:

I would guess that there are high political returns to prevention *after* a disaster happens. This might be constrained rational (the actual disaster causes people to update their beliefs about how likely this kind of disaster is), but it's probably just a salience thing; the actual disaster makes it salient which makes preventing a recurrence look good to voters.

The problem is that we've now reached a point where there are some potential threats that are earth-threateningly catastrophic. So it seems to me that we'd better either get a lot more rational real quick or hope that it is the nature of these threats to cause some relatively minor damage before they cause the catastrophic damage.

Lord writes:

Contrary to your prior post that advised voters to wait until a crisis to act isn't it?

Kurbla writes:

"In the hands of rational voters, government is strong medicine for public goods problems. But in the hands of real voters, government is usually a big bottle of snake oil. "

Hmm ...

You might want to prove that these same real voters demonstrate more reasonable decisions as consumers - but knowing only two facts - that 15% of people in USA are obese and 60% are overweight, it appears that human rationality as filtered through political system is still better than one people demonstrate directly in their own lives.

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