Saturday, April 12, 2008

Would more involvement in political decision-making make people happier?

Like many economists, I admit to being fond of the concept of rational ignorance. This explains why most people are not very good at giving accurate answers to factual questions about politics. It is not rational for voters to spend much time informing themselves about politics because their individual vote is most unlikely to have much influence on the outcome of an election. For example, even if there is only a 10 vote difference between the main contenders in an election it would make no difference to the outcome if one voter changed his/her vote.

Another concept that is close to the heart of many economists, including myself, is revealed preference. This refers to the view that people tend to get more satisfaction from the things they choose to do than from the things they choose not to do. For example, if a person chooses to go for a walk rather than to go for a swim it seems reasonable to presume that this person obtains greater satisfaction from walking than from swimming at that time.

So, how can we interpret the fact that many people vote in elections under systems where voting is not compulsory? The logic that lies behind the concept of rational ignorance suggests that individuals have no incentive to vote because it is highly unlikely that their individual vote will decide the outcome. The logic behind the concept of revealed preference suggests, however, that if people spend time voting they must get some satisfaction from this activity.

Research by Bruno Frey and Alois Stutzer (“Happiness and Economics”, Princeton Univ. Press, 2002) suggests that increased possibilities of direct participation in public decision-making via popular referenda and decentralization of power do increase reported levels of well-being of survey participants. The research suggests that people gain satisfaction from participation in political processes, irrespective of the outcome.

The research was undertaken using Swiss data, taking advantage of the differential reliance on referenda and differing degrees of local autonomy in the 26 cantons in Switzerland, as well as of different voting rights of nationals and foreigners who are subject to equal treatment in other respects. In terms of techniques used, this is one of the nicest pieces of research that I have seen using happiness data.

How should we respond to the results of this research?

Some politicians might be tempted to suggest that it is not worth trying to satisfy the desire of citizens for greater political involvement because this desire is insatiable. However, there is evidence that this is not so in the percentages of survey respondents in different countries who view having more say in government decisions as a more important aim for their country than maintaining order, fighting inflation or protecting freedom of speech. The percentages in Australia, New Zealand and the United States were 40%, 38% and 32% respectively in 2000 (using data from R Inglehart et al, “Human Beliefs and Values”, 2004). By contrast, the corresponding figure for Switzerland, where citizens have much greater opportunities for direct participation in political decision-making, was only 16%. Moreover, the percentage who rated the political system as bad was much lower in Switzerland than in Australia and New Zealand.

Other politicians might suggest that because of rational ignorance voters may be too easily swayed toward choices that are not in their own best interests. I admit to some sympathy with this view. However, greater involvement of citizens in public decision-making may encourage them to become better informed about public policy issues. If greater citizen involvement in political decision-making resulted in a bias toward bad choices we would not expect average income levels in Switzerland to have remained among the highest in the world.

Perhaps politicians should find a way to become comfortable with the idea of greater citizen participation in political decision-making.

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