You can see the elections as trading in influence

The election campaign is getting underway. In November we can decide again which wise people can make decisions in our common interest. You might think that this is not food for economists, but there are economists who have also thought about these types of choices. Although voting is not directly about money, it is a choice about who you select in the voting booth. You can see it as trading in influence.

The people who want to be elected compete with each other by making an offer that best appeals to a certain segment in the voter market and offering influence. The voter has a budget of one vote to buy influence that suits his own interests as much as possible. At least, that's how they see it in the public choice theory.

New insights about the elections
Do you gain new insights by looking at elections this way? Partly yes. For example, the economist Mancur Olson discovered in the XNUMXs that small groups with a major interest are much more active in promoting their interests than large groups with a small interest. A frequently used example of this is agriculture or fishing: a relatively small part of society (farmers) has an interest in high agricultural prices and organizes itself in a trade association to maintain agricultural policy. The rest of society has an interest in lower food prices but does not set up an association for this purpose - and finds it more important that the Consumers' Association tests washing machines than to spend its time on grain prices. For the first group, the costs of membership outweigh the possible benefits, for the second group the (transaction) costs of self-organization are too high given the low benefits.

This also touches on another insight from Olson: smaller groups of people still want to organize themselves based on shared values ​​and goals, but in larger organizations people often only become members if there are also personal benefits. I sometimes call that the ANWB model: you are a member, even if you only moderately agree with the car lobby, because of the Roadside Assistance, the members magazine and all kinds of discounts. And the ANWB can use this large number of members, some of whom are actually customers, as supporters in the lobby. Something similar applies to the Eigen Huis Vereniging: many are members not primarily because of the lobbying activities in The Hague, but because of the services they provide. Where this is lacking in our individualistic society, such as in the trade union movement or employers' organizations, there is a great opportunity for it free rider behavior: people who benefit by free-riding, but do not become members and pay. Perhaps, I sometimes think, more people would have been members of LTO if it had still owned the accounting firms and Interpolis and thus offered discount schemes or extra services.

Trade-off of specific interests
Olsen is also one of the economists who concluded that this type of mechanism creates too much room for lobbying processes and that in politics the general interest is replaced by a trade-off between specific interests. This creates policies where the benefits accrue to a small group (for example the car industry or the pharmaceutical industry) and the disadvantages are spread over the entire population. This also concerns advocacy from, for example, the nature movement or a specific social goal. These interests are also not necessarily in line with the general interest.

Ultimately, this may even lead to a (relative) decline of the country in terms of prosperity. I hope that the general interest (whatever that may be) continues to prevail in the formation, even after the elections.

Krijn J. Poppe

Krijn Poppe worked for almost 40 years as an economist at LEI and Wageningen UR and now holds a number of advisory and management positions. For Boerenbusiness he dives into his bookcase and discusses current developments on the basis of studies that have become classic.

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