Monday, June 15, 2009

Principles and Politics: Like Oil and Water

By Randall Holcombe

My title is taken from my review of Timothy Besley’s book, Principled Agents? The Political Economy of Good Government, which appeared in the June 2009 issue of The Review of Austrian Economics. The reasoning behind my title is that the institutional structure of democratic politics puts elected representatives who act on their principles at a disadvantage. Unprincipled politicians come out ahead because of the design of the system.

To accomplish anything in a legislature requires the support of a majority of legislators. Nobody can do anything by themselves. The mechanism by which legislators can further their agendas is to trade votes with each other. “I’ll vote for your bill if you’ll vote for mine.” Legislators accumulate power when they agree to vote for someone else’s bill; they use up accumulated power when they call in their IOUs to secure the support of colleagues for their bills. The legislators who accumulate the most power in this setting are those who are ALWAYS ready to trade.

If a legislator always votes on principle, that legislator will have no chance to enter the political exchange process, and no chance to “buy” the support of other legislators by trading votes. If a certain measure goes against the principled legislator’s principles, the legislator will always vote against, so there’s no point in bargaining to try to change the principled politician’s vote. If a certain measure aligns with the principled legislator’s principles, the legislator will always vote for, and there is no need to buy that legislator’s vote.

An unprincipled politician can always be bought. If a measure comes up that the unprincipled legislator is inclined to oppose, supporters can offer that legislator a trade to get the legislator’s support. The legislator trades his/her vote, and gains a future claim on the vote of a colleague. That’s how power is accumulated in the legislature.

If a measure comes up that the unprincipled legislator is inclined to support, other supporters still must bribe the unprincipled legislator to keep his/her vote. Supporters know that even though the legislator is inclined to support the legislation, if the opponents make a good enough offer the unprincipled legislator will vote with the opponents. Unprincipled legislators have to be bribed even to vote the way they would be inclined to vote anyway, and in the process they accumulate even more political power in the form of claims against the future votes of their colleagues.

The system is set up to reward unprincipled politicians and punish principled ones, and the process of natural selection works here just as in many other settings. The principled politicians get weeded out as unprincipled politicians gain influence. Principles and politics don’t mix.