Bryan Caplan  

Retrospective Voting: Worse Than Chance

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Voters literally know less than zero about economic policy - we would have better policies if they just voted randomly.  But people who believe in "retrospective voting models" often retort that voters' policy incompetence doesn't matter.  They don't have to understand economics; they can simply reward politicians who deliver the goods, and punish those who don't.

Sounds good.  But does it work?  Tim Harford reports on some interesting research showing that voters actually reward politicians more for prosperity that they didn't cause.  In other words, voters know less than zero about causal responsibility:

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 skillful 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.

Admittedly, things could be worse - imagine a world where voters actually punish skillful incumbents.  Compared to policy-based voting, retrospective voting is the lesser evil.  In fact, I think it's an important reason why policy isn't much worse.  Nevertheless, retrospective voting doesn't work nearly as well as its fans would have us believe.

HT: Eric Crampton

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The author at The Volokh Conspiracy in a related article titled Why Voters Reward Lucky Governments More than Good Ones: writes:

    Some scholars who discount the dangers of

    [Tracked on June 26, 2009 1:31 PM]
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Alex J. writes:

Are there any voting schemes which would especially favor retrospective voting?

Zac Gochenour writes:

"In fact, I think it's an important reason why policy isn't much worse."

I think its the reason why policy isn't much worse. It is really the only tenable explanation I can think of.

Prakhar Goel writes:

"Are there any voting schemes which would especially favor retrospective voting?"

Yes: Restrict voting to the competent. Possible criteria consisting of say... the ability to solve a quadratic equation. No need to have an age limit with this system.

A much more through exposition is available in "The Republic of Gondour" by Mark Twain.

Carl Shulman writes:

Doesn't this just reflect that pro-growth policy within a jurisdiction often involves goring political important oxen? Voters would then reward good times equally regardless of the cause, while punishing free trade and other efficient policies.

Yancey Ward writes:

On average, I would have to conclude that the same applies to economists, present company not included, however.

frankcross writes:

I've always thought this retrospective voting was good for a different reason. Incumbents have an electoral advantage. Bad economic times counteract that, and I think it prevents political entrenchment and encourages experimentation with new policies. Carter nearly beat Reagan with a terrible economy, without this voting, Reagan may never become President.

Richard A. writes:

"Voters literally know less than zero about economic policy"

A good example would be free trade where too many voters hold the belief that restricting imports would increase the size of the GDP.

Kurbla writes:

Yes, but consumers do the same thing. If you noted that your local computer dealer sells excellent and cheap new computers, and you decided to buy one - do you reward dealer because HE did something well, or because of global improvement of technology? I guess that in 80% of cases, you bought computer because of some global technological improvement. Without such improvement, you wouldn't buy new computer even if your dealer was the world champion.

Sometimes we cannot (or we are not willing to invest effort) to recognize whether quality results from luck or competence, but in the long terms, statistics will sort it for us. So called "invisible hand."

Alex Harris writes:

Isn't there a bigger problem with retrospective voting? Policies have some short-term effects and some long-term effects and voters are much more likely to punish/reward the short-term effects. So, we get politicians trying to create apparently good short-term effects at the expense of really bad long-term outcomes. Wasteful spending is a good example of this, but there are plenty of others.

David C writes:

"Compared to policy-based voting, retrospective voting is the lesser evil."

Yep, retrospective voting is the worst system imaginable, except for all the others. Certainly adjustments can be included to compensate for the degree of randomness inherent in such a voting method, but the gigantic advantage is that retrospective voting is based on output and policy voting is based on input.

"Yes: Restrict voting to the competent. Possible criteria consisting of say... the ability to solve a quadratic equation."

Or maybe a literacy test? Never gonna happen. Thank Jim Crow for that.

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