Bryan Caplan  

The Ultra-Selective Rationality of Politicians

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Me back in 2003:

Politicians, just like other people, may prefer some beliefs over others. But unlike average voters, politicians often do have a significant probability of affecting outcomes, and their efforts have direct repercussions. A politician who does not have rational expectations about the impact of his policy stances on his career pays a high price, so in this area the standard arguments for rationality (Muth 1961) are compelling. Politicians who systematically misunderstand voters' feelings forego large opportunities for political profit. They have an incentive to learn from mistakes and hire expect advice.

 

Systematic mistakes about what the voters want also open a politician to takeover bids from more rational challengers. In any case, people with rational expectations about voters' preferences self-select into the political arena. Even if this is a small fraction of the population, it could easily be large compared to the number of available offices. Other systematic mistakes about their technology for producing votes are similarly unlikely: politicians cannot afford to have irrational expectations about the number of votes the marginal value PAC dollar buys, the probability the press will uncover skeletons in their closet, or the likelihood that evidence of current indiscretions will leak out. Rationality about expected compensation pays too: Politicians are unlikely to have irrational expectations about their level of fringe benefits, or the extent to which political experience will ultimately increase their market value in their post-political career.

 

However, it does not follow that politicians will be rational about the actual impact of the policies that they implement. They merely need to gauge voters' reaction to their policies; if the voters have irrational expectations about what policies will accomplish, a politician who rationally second-guesses them gets little benefit. In fact, if it is indeed impossible to fool all of the people all of the time, politicians who share the irrational assessments of their constituents may actually be at a competitive advantage compared to rational politicians who cynically pander to the prejudices of the electorate.

Alex Tabarrok in 2016:

More questions are being asked, more data is being collected and more randomized experiments are being run in the effort to win the presidency than will ever be used to choose policy by the presidency. Sad.





COMMENTS (1 to date)
Topher Hallquist writes:

"politicians cannot afford to have irrational expectations about the number of votes the marginal value PAC dollar buys"

Two words: Jeb Bush.

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