On the economics of democracy
My limited know-how of Micro and Macro Economics leads me to believe that social structures cannot develop in isolation. Economics is a rational phenomena. If one studies the world events, one would come to the conclusion that economics is a great leveller. Illegal businesses collapse because of the same phenomena that formed the ideology of those businesses. Similarly irrational social structures also collapse on account of the same forces that led them to build those structures in the first place. The rational study of political and social systems can only be done in the backdrop of economic phenomena. With this premise let us have a look at the economic aspects of democracy.
The calculus of voting:-
A political treatise was written by Anthony Downs in 1957 titled "An Economic Theory of Democracy". In his treatise Downs presented a rational calculus of voting.
It predicts that a citizen would turn out to vote if:
pB + D > C
B - benefits that the voter will personally receive only if the voter's candidate of choice wins the election (instrumental value of voting)
D - captures the intrinsic satisfaction that the voter receives from the act of voting itself, regardless of who wins the elections (immanent value of voting)
C - represents all the costs, i.e., sum of all the personal costs of voting, both direct costs in terms of time and energy it takes to make the trip to the polls on the day of the election as well as the time and energy one invests beforehand in learning about the issues and the candidates, and the opportunity costs in terms of forgone wages etc.
p - the probability that one's vote will be decisive in the sense that it either makes of breaks a tie in one candidate's favour
The model predicts that if pB + D < C citizens will abstain from voting and if pB + D = C, they will be indifferent.
p turns out to be very very small because there are millions of voters. Hence Down concludes that a voter who is able to make rational choice would vote as long as D > C, which would happen in quite less number of cases.
Down's hypothesis was later developed by Riker and Ordeshook (1968,1973).
Riker and Ordeshook (1968) shifted the attention of modern political scientists from explaining why people don't vote to explaining why they do. Rational choice appears to predict unrealistically low levels of outcome.
They propose :-
R = PB - C + D
R - the reward an individual voter receives from one's act of voting
B - the differential benefit, that an individual voter receives from the success of his more preferred candidate over his less preferred one
P - the probability that the citizen will, by voting, bring about the benefit, B,
C - the cost to the individual of the act of voting
D - psychological and civil benefit of voting
Here P can matter, because as the race gets closer to a tie, voters perceive that their vote has a much higher probability of affecting the outcome. As your candidate's vote share approaches 50% P increases.
The calculus of voting in India today (2014)
Let us now analyse/predict the voter turnout phenomena to our current Lok Sabha pre-election scenario. In order to do so we need to look at the historical trends of various factors. Lets do that first...
My limited know-how of Micro and Macro Economics leads me to believe that social structures cannot develop in isolation. Economics is a rational phenomena. If one studies the world events, one would come to the conclusion that economics is a great leveller. Illegal businesses collapse because of the same phenomena that formed the ideology of those businesses. Similarly irrational social structures also collapse on account of the same forces that led them to build those structures in the first place. The rational study of political and social systems can only be done in the backdrop of economic phenomena. With this premise let us have a look at the economic aspects of democracy.
The calculus of voting:-
A political treatise was written by Anthony Downs in 1957 titled "An Economic Theory of Democracy". In his treatise Downs presented a rational calculus of voting.
It predicts that a citizen would turn out to vote if:
pB + D > C
B - benefits that the voter will personally receive only if the voter's candidate of choice wins the election (instrumental value of voting)
D - captures the intrinsic satisfaction that the voter receives from the act of voting itself, regardless of who wins the elections (immanent value of voting)
C - represents all the costs, i.e., sum of all the personal costs of voting, both direct costs in terms of time and energy it takes to make the trip to the polls on the day of the election as well as the time and energy one invests beforehand in learning about the issues and the candidates, and the opportunity costs in terms of forgone wages etc.
p - the probability that one's vote will be decisive in the sense that it either makes of breaks a tie in one candidate's favour
The model predicts that if pB + D < C citizens will abstain from voting and if pB + D = C, they will be indifferent.
p turns out to be very very small because there are millions of voters. Hence Down concludes that a voter who is able to make rational choice would vote as long as D > C, which would happen in quite less number of cases.
Down's hypothesis was later developed by Riker and Ordeshook (1968,1973).
Riker and Ordeshook (1968) shifted the attention of modern political scientists from explaining why people don't vote to explaining why they do. Rational choice appears to predict unrealistically low levels of outcome.
They propose :-
R = PB - C + D
R - the reward an individual voter receives from one's act of voting
B - the differential benefit, that an individual voter receives from the success of his more preferred candidate over his less preferred one
P - the probability that the citizen will, by voting, bring about the benefit, B,
C - the cost to the individual of the act of voting
D - psychological and civil benefit of voting
Here P can matter, because as the race gets closer to a tie, voters perceive that their vote has a much higher probability of affecting the outcome. As your candidate's vote share approaches 50% P increases.
The calculus of voting in India today (2014)
Let us now analyse/predict the voter turnout phenomena to our current Lok Sabha pre-election scenario. In order to do so we need to look at the historical trends of various factors. Lets do that first...
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