by Russell Roberts* December 3, 2007
Politicians are just like the rest of us. They find it hard to do the right thing. They claim to have principles, but when their principles clash with what is expedient, they often find a way to justify their self-interest. If they sacrifice what is noble or ideal for personal gain, they are sure to explain that is was all for the children, or the environment or at least for the good of society.
Pigs don't fly. Politicians, being mere mortals like the rest of us, respond to incentives. They're a mixture of selfless and selfish and when the incentives push them to do the wrong thing, albeit the self-interested one, why should we ever be surprised? Why should be fooled by their professions of principle, their claims of devotion to the public interest? We call politicians our representatives and they often claim to be fighting for us. But when we think about it, we understand that our interests are diverse and that no politician can really fight for all of us. Inevitably, our interests and desires clash and politicians are forced to choose between the general interest and the special interest. Which wins?
The answer depends on the constraints facing the politicians. So politicians in a system with meaningful elections and competition are more likely to pursue policies that please the general public. Dictators have more range to pursue their own self-interest at the expense of the people.
The Logic of Political Survival, by Bruce Bueno de Mesquita, Alastair Smith, Randolph Siverson and Jame Morrow, looks at how the level of electoral accountability affects political outcomes. Bueno de Mesquita discusses the intuition behind the theories in the book in this EconTalk podcast.
For better or worse, it is an unavoidable reality that even when politicians are constrained by real or potential competition, they still have wiggle room for pursuing their own self-interest because the level of knowledge among the electorate is imperfect. The electorate can be misinformed. Or rationally ignorant. It's costly for voters to be well-informed. That gives politicians, even in a democracy, the chance to pursue special interests at the expense of the general interest.
EconLog blogger Bryan Caplan explores these issues in his book The Myth of the Rational Voter: Why Democracies Choose Bad Policies
This wiggle room for politicians in a democracy leads to some strange outcomes. It allows politicians to do the right thing and the wrong thing at the same time. How is that possible? We shall see below. Even stranger, the imperfect information available to voters can even allow politicians to do the wrong thing and pass it off as the right thing if we're not paying close enough attention.
Bruce Yandle uses bootleggers and Baptists to explain what happens when a good cause collides with special interests.
When the city council bans liquor sales on Sundays, the Baptists rejoice—it's wrong to drink on the Lord's day. The bootleggers, rejoice, too. It increases the demand for their services.
The Baptists give the politicians cover for doing what the bootleggers want. No politicians says we should ban liquor sales on Sunday in order to enrich the bootleggers who support his campaign. The politician holds up one hand to heaven and talk about his devotion to morality. With the other hand, he collects campaign contributions (or bribes) from the bootleggers.
Yandle points out that virtually every well-intentioned regulation has a bunch of bootleggers along for the ride—special interests who profit from the idealism of the activists and altruists.
Yandle discusses his theory of regulation in this podcast. You'll also find additional readings on the theory there.
If that's all there was to Yandle's theory, you'd say that politics makes for strange bedfellows. But it's actually much more depressing than that. What often happens is that the public asks for regulation but inevitably doesn't pay much attention to how that regulation gets structured. Why would we? We have lives to lead. We're simply too busy. Not so with the bootleggers. They have an enormous stake in the way the legislation is structured. The devil is in the details. And a lot of the time, politicians give bootleggers the details that serve the bootleggers rather than the public interest.