How concerned should we be about voter irrationality?

I heard Gary Gray, a minster in the Australian government, hold forth last week about the 1.5 million Australians who have a right to vote but are not on the electoral roll. He referred to this as ‘a blight on our electoral roll and the integrity of our system’. Such comments may be understandable within the context of the compulsory voting system in Australia, but does compulsory voting make sense? Would it not be more sensible to discourage people from voting if they do not see exercising their political rights as having sufficient importance to take the simple steps necessary to enrol and vote?

As I noted in a recent post it can be rational for voters to cling to irrational beliefs on political issues because the cost is low - there is a miniscule probability that the vote of any individual will be decisive in changing the result of an election. This explains the persistence of a wide disparity between views of voters and experts on many issues and why views of voters are often internally inconsistent e.g. simultaneously supporting reductions in government spending while supporting increases in many individual areas of spending.  It seems reasonable to expect that people for whom politics has no importance would be most prone to cling to such irrational positions.

How likely is it that people who have no interest in politics could have a decisive impact on election results? Figure 1, constructed from World Values Surveys in the period 2005-07, suggests that it is very likely. A considerable percentage of people in high-income democracies say that politics is not at all important in their lives. The percentages are relatively high in Italy, France and Britain, and relatively low in Sweden, Norway and Japan.

There is no reason why everyone should view politics as having some importance in their lives. You might expect, however, that people would be unlikely to vote unless forced to if politics had no importance to them. Figure 1 suggests, however, that a relatively high proportion of these people do vote in most of the countries shown.

Some people might suggest that it probably doesn’t make much difference if people vote even when politics has no importance in their lives because random votes would tend to cancel out. Unfortunately, however, there is evidence that the votes of such people are not random. Figure 2 suggests that those for whom politics is ‘not at all important’ are more likely than others to say that ‘the government should take more responsibility to ensure that everyone is provided for’. Just think about that for a moment. How can they expect governments to take on more responsibilities if people like themselves have little interest in politics, which is largely about holding governments accountable for the way they exercise their responsibilities?

Perhaps some readers might be thinking that the people who say that politics is not at all important in their lives might actually take some interest in politics, particularly at election time. After all, some of us sometimes show some interest in sports on TV that we would claim are not at all important in our lives. The results of the World Values Surveys shown in Figure 3 suggest, however, that the extent to which voters are interested in politics is closely related to its importance to them. The Figure has been constructed from responses for the countries shown in Figure 1. (The columns add to 100% on the depth axis.)

Voters who say that politics is not at all important in their lives tend to have relatively low confidence in political parties – 43% saying that they have no confidence at all in political parties, versus 19% for all voters. That might make some readers wonder whether their desire for governments to take on more responsibility could be explained by relatively high confidence in the civil service. While the percentage with a great deal of confidence in the civil service is higher than the average for all voters – 4% versus 3% - the percentage with no confidence at all in the civil service is substantially higher – 18% versus 9%.(The data are for the countries shown in Table 1).

Some other characteristics of voters who say that politics is not at all important in their lives might be of interest. Their self-positioning on the left-right political spectrum is not markedly different from that of other voters. They are less likely to say that democracy is absolutely important (47% versus 60% for all voters) and more likely to say that it is good to have experts make political decisions.  They tend to be disproportionately either young (15-24) or old (65 or older); less well educated; and female (57%). They are less likely to rate the state of their health as very good (24% versus 30% for all voters) and more likely to rate it as poor or very poor (33% versus 24%). They tend to be conservative in their views on social issues (divorce, abortion, homosexuality and prostitution).They have a greater tendency to rate the fight against crime as an important goal (29% versus 19% for all voters). They are less likely than other voters to be members of religious, sport or recreation, or charitable organizations and are less likely to rate friends as very important. They are much less likely than other voters to agree that ‘most people can be trusted (29% versus 46%)

.

Should restrictions be introduced on the right to vote in an attempt to exclude people who have no interest in politics? It is not obvious how this could be done. Removal of compulsory voting requirements would make sense in Australia as a step in that direction. The experience of other countries suggests, however, that making voting voluntary would not do much to discourage people who have no interest in politics from voting.

It might be desirable to promote a cultural change away from the view that voting is a civic duty towards the view that people should refrain from voting unless they have some interest in politics. Policy outcomes would probably be worse than at present, however, if the political field was left to be fought over by people who are strongly interested in politics because of their links to narrow interest groups. A battle among interest groups could be predicted to benefit the groups that able to marshal their members effectively at the expense of broader community interests.

In order to work satisfactorily, democracies need a substantial proportion of citizens who do not have strong links to narrow interest groups to inform themselves about public policy issues, to take part in public discussion of such issues and to encourage others to do likewise. To the extent that this is happening it can probably be most readily explained in terms of public-spirited identity perceptions – i.e. individuals who see themselves as being the kind of person who does that kind of thing and gaining satisfaction from acting in that way. How could more people be encouraged to do this? 

Should the media be 'fair and balanced' or 'free and transparent'?

Wayne Swan appeared to be speaking like a statesman when he recently said:

‘Nothing could be more important to the quality of our political debate and our national conversation than having fair and balanced reporting.

And to have fair and balanced reporting you do need a degree of independence at the editorial level to make sure that it is not unduly influenced by commercial considerations.’

Swan was discussing whether Gina Rinehart, now a substantial shareholder of Fairfax, should be required to sign a charter of editorial independence as a condition for representation on the Fairfax board of directors. He was fuelling concerns that Rinehart might seek to trash the reputation of the big city dailies – perhaps the Sydney Moaning Herald could become the Sydney Mining Herald – or to close down these loss-making ventures. It seems more reasonable to speculate that Rinehart’s objective is simply to profit directly from her media investment while, at the same time, redressing what she would perceive as editorial bias. 

However, the question that needs to be considered is whether there is some kind of public policy issue involved here, as Swan seems to imply. Alternatively, should politicians view this as a matter for resolution between Rinehart and representatives of other shareholders, taking into account the possible impact of their actions on the reputation of their papers and the views of the journalists’ collectives only to the extent that they consider such matters are relevant?

I think John Roskam, executive director of the IPA, clarified the issues masterfully in the Financial Review (the best masthead owned by Fairfax) this morning:

‘Swan is wrong. Dead wrong. There is something more important than fair and balanced reporting – and that’s free reporting. Let’s be absolutely clear.

Swan’s “fair and balanced” reporting has never existed, doesn’t exist and never will exist. Fairness is entirely in the eye of the beholder. It’s a travesty of the historical record to claim that democracy needs a fair and balanced media’.

A free media involves freedom of ownership, freedom of owners to run their business, freedom of conscience for editors and journalists, and freedom of speech. Everyone should have the freedom to buy and sell shares in media outlets as they wish. The owners of media should have the freedom to dictate editorial policy (or to leave editorial policy to the editors they appoint) irrespective of the wealth of the wealth of the owners or the interests that they represent. Editors and journalists should have the freedom to seek employment with media owners whose views are compatible with their own, or to set up their own media outlets. Owners of different publications should have the freedom to criticize the outputs of other publications.

It is remarkable that some of these freedoms are already restricted in Australia and others are being threatened by the current government.

If there ever was a case that particular media outlets have market power that enables them to exert undue influence on public opinion it has surely evaporated with the internet now providing access to multiple sources of information and opinion. In particular, the influence of media moguls with particular industry or political interests is moderated by the scrutiny of other media players looking for evidence that editorial opinion could be biased. In my view that is a much healthier situation than exists with respect to publicly owned media such as the ABC, where ruling class groupthink thrives despite obvious efforts to promote the appearance of fairness and balance. Media freedom promotes transparency; media regulation promotes opacity.

I wonder whether Wayne Swan would be expressing a similar opinion about the importance of editorial independence for the quality of political debate if the AWU, or some other trade union, attempted to take a controlling interest in Fairfax or some other media company. 

When is a sense of entitlement justified?

I have been having a discussion with Jim Belshaw about the meaning of entitlement, stemming from my recent post ‘What are Australians angry about?’  On Saturday Jim wrote:

‘It seems to me that that word entitlements has become, to use an ugly but useful modern term, a code word for a much broader ideological debate. Entitlements used to mean the fact of having a right to something or the amount to which a person has a right. This is the neutral meaning. Now it has acquired a heavy semantic overload’.

I agree. When I wrote: ‘I think the problem is the growth of a sense of entitlement to be looked after by governments’, I was referring to growth in what I see as an unwarranted sense of entitlement. 

It seems to me that we have almost reached a stage where people say: ‘I’m unhappy, so what’s the government going to do about it?’ Governments seem only too willing to encourage this. A recent government intervention in Australia involves screening kids for mental illness at three years of age. No doubt doctors will discover that a lot of kids are unhappy and then ‘aorta politics’ will take over. We will soon hear a lot more people saying ‘aorta’ be doing more to help us. 

However, people are sometimes justified in expressing a sense of entitlement – or righteous indignation - when something they value is taken away from them. It would probably be reasonable to guess that moral intuitions about natural rights stem from the efforts of our tribal ancestors to protect their food supplies. (Incidentally, this doesn’t seem to be covered by Jon Haidt’s schema of moral foundations discussed in my last post.) A sense of entitlement is also related to our sense of fairness and our desire to punish people (including political leaders) who have shown themselves to be untrustworthy.

It seems to me that the central issue in considering whether a sense of entitlement is justified is whether the expectations involved are reasonable. It might be useful to attempt to rank expressions of entitlement in terms of the reasonableness of the expectations involved.

Property rights deserve high ranking in terms of the reasonableness of expectations that they will be protected. There is even a constitutional provision, as readers who have seen ‘The Castle’ would know, that when the Commonwealth acquires property compensation must be ‘on just terms’. Property rights are constrained in various ways. Land owners do not usually own the minerals beneath their land in this country, so it is hardly reasonable for them to expect to be able to prevent mining on their properties. But it is reasonable for them to expect compensation for the costs and inconveniences they experience when mining takes place. I would have thought land owners could have a reasonable expectation of being able to do what they wish with trees growing on their properties, but governments have taken a different view.

Another area deserving high ranking in terms of reasonableness of expectations concerns contractual obligations entered into by governments.  Australian governments have a good reputation of meeting interest and repayment obligations when they borrow money (despite Jack Lang's efforts to tarnish this reputation in the 1930s). Australians can have a reasonable expectation that governments in this country will meet obligations to employees. Until recently, Australian governments also had a pretty good record in not raising mineral royalty charges beyond levels agreed with mining companies prior to mining, but sovereign risk has escalated since the Commonwealth government has acted to appropriate an additional slice of mineral rents. In my view mining companies have justification for their sense of entitlement to the rents that have been taken from them. It is reasonable for households who have installed solar heating in response to excessively generous incentive programs to expect government agencies to meet their contractual obligations. In my view, householders in New South Wales had justification to be enraged the plans of the newly elected O’Farrell government to renege on those contracts.

Further down the ranking in terms of reasonableness of expectations - although still deserving fairly high ranking in my view - are the political obligations accepted by governments over many decades for provision of various social welfare programs. Age pensions are a prime example. It would be unreasonable, however, to expect that governments would never under any circumstances reduce the benefits provided under such programs. The assistance provided must be limited ultimately by what the community can afford.

Further down the ranking there are programs like the provision of tariff assistance to industries. This arose as a result of rent-seeking by industry, misguided government planning and a view fostered by governments over many decades that assistance would be provided to all industries on a ‘needs basis’. It is the best example of a government-fostered entitlement mentality that I can think of in Australia. Yet, it is understandable that many of those who benefited from this assistance would feel a sense of grievance when it was withdrawn. The assistance regime stayed in place for many decades with little complaint – except for a few people in efficient export industries that were adversely affected, some academics and civil servants, and one politician (Bert Kelly). When assistance was reduced, the culpability of governments in fostering the unreasonable expectation that ‘infant industry’ and ‘temporary’ protection could last forever was recognized by making reductions gradual (over about half a century in the case of the car industry) and providing adjustment assistance in some instances.

As we go further down the ranking of reasonable expectations we come to incentive programs of various kinds. One example that comes to mind is the provision of taxation benefits to encourage investment in private superannuation. I noted in 2010 that this had resulted in total government support for retirees being remarkably similar across a wide range of income levels, despite means testing of pensions. The taxation arrangements for superannuation provide perverse incentives for people to retire early, splurge lump sums and live off accumulated wealth until they become eligible for the aged pension. There is no basis for anyone to have a reasonable expectation that such rorts would be allowed to continue indefinitely. It seems to me that those complaining about recent government action to limit the tax concession are showing an unwarranted sense of entitlement.

Election promises are at the bottom of my ranking of reasonable expectations. However, some election promises do appear to encourage reasonable expectations of what a government might do or not do. For example, Julia Gillard’s promise that ‘there will be no carbon tax under a government I lead' did not sound like a ‘non-core promise’ (to use a phrase made famous by John Howard). At the very bottom of the ranking of reasonable expectations, in my view, are the expectations fostered by a statement by Barry O’Farrell that his party had ‘no plans’ to privatise various things. Rather than a promise, that form of words seems intended to convey a refusal to make a promise.

Having completed this ranking, I now wonder whether election promises deserve higher ranking. The ranking provided above is largely in terms of what seems reasonable to expect on the basis of experience. Political promises probably deserve higher ranking in terms of the standards it should be reasonable to expect of our politicians. I don’t think that people are displaying an unwarranted sense of entitlement when they express disgust with politicians who break promises. 

Does moral foundations theory support the concept of rational irrationality?

I think it does. And I think an understanding of why it does sheds some further light on the difficulty that democratic governments have in dealing with complex economic issues. So, if you don't already know about moral foundations theory and rational irrationality, you might be about to learn something worth knowing.

Jonathan Haidt explains moral foundations theory in ‘The Righteous Mind: Why good people are divided by politics and religion’, 2012.  His basic idea is that the virtues that are found in many cultures are related to adaptive challenges of social life that have been identified by evolutionary psychologists. While moral foundations are innate, they are expressed in differing ways and to differing extents in different cultures and by different political groups. Policy concerns of different political groups can be explained to a large extent in terms of the moral mentality of their members.

The concept of rational irrationality was developed by Bryan Caplan in ‘The Myth of the Rational Voter’, 2007. Caplan provides evidence that the views of voters on economic issues differ substantially from those of economists. He attributes this to irrationality. He argues that people actually have a demand for irrationality – that many have an almost religious attachment to irrational beliefs and tend to cling to them until the cost becomes too high. In the political arena an ongoing attachment to irrationality is a predictable response because the cost of clinging to irrational political beliefs is low. There is a miniscule probability that the vote of any individual will be decisive in changing the result of an election. For the individual, voting is likely choosing from a menu and getting the same dish whatever you order.

My reaction on this blog a few years ago was that I didn’t think ‘rational irrationality’ would provide as good an explanation of voter behaviour as some less extreme concepts, such as ‘bounded rationality’ used by Douglass North. My views have changed, however, since I started thinking seriously about moral foundations theory.

The idea of linking moral foundations theory and rational irrationality is not original. Christian Galgano, an undergraduate at the University of Virginia, has published an article entitled: ‘The Righteous Mind of the Irrational Voter: Why good people choose bad policies’, ‘The Oculus’, 10(1). Christian develops what he refers to as a Haidt-Caplan model to explain why voters are rationally irrational. I think he deserves high praise for linking these ideas.

I am not sure how pleased Jon Haidt would be that one of the messages people are taking from his book is that moral concerns lead people to cling to irrational policy positions. He wants readers to understand that we are all deeply intuitive creatures whose gut feelings tend to drive our political reasoning. His aim is that this understanding should help us all to recognize that our political opponents are good people whose beliefs flow from genuine moral concerns. I agree that that is desirable, but is unlikely by itself to result in better public policies.

So, how do moral concerns lead people to hold on to irrational political beliefs? First, as already noted, there is no incentive for individuals to go beyond sloppy intuitive thinking when their individual views are unlikely to be decisive in changing government policy. Second, as Jon Haidt argues, identification with groups tends to blind people to the wisdom of people outside those groups. Third, even when individuals expect to be held to account for their beliefs, this does not necessarily lead them to dispense with irrational beliefs. In this context, Haidt refers to research by Phil Tetlock about the effects of asking people to justify their beliefs to an audience. As might be expected, this makes individuals think more systematically, but often in a one-sided attempt to rationalize their existing views. They give a more even-handed consideration to alternative points of view only if they do not know the views of the audience and believe that it is well informed and interested in accuracy.

What does moral foundations theory suggest about potential sources of rational irrationality? Haidt identifies six moral foundations:

·         Care/harm makes us sensitive to signs of suffering and need.

·         Fairness/cheating is concerned with reciprocity. It makes us sensitive to issues relating to trustworthiness, opportunism and punishment.

·         Loyalty/betrayal makes us sensitive to group interests.

·         Authority/subversion makes us sensitive to issues relating to rank and status.

·         Liberty/oppression makes people notice and resent signs of attempted domination by bullies and tyrants.

·         Sanctity/degradation evolved to help us meet the challenge of living in a world of pathogens and parasites. It makes it possible to invest objects with irrational and extreme values, which in turn helps to bind groups together.

Irrational beliefs about sanctity seem to me play a large role in public opinion about economic policy in Australia. The collection of poll results posted by Possum Comitatus on Crikey a few days ago provides some good examples. For instance, the percentage of the population opposed to privatisation of Telstra, Qantas and the Commonwealth Bank still far exceeds the percentage in favour, many years after these ‘icons’ were sold. There also seems to be massive opposition to sale of Australian farm land to foreign companies.

What basis do I have to say that such positions are irrational? My only basis (apart from my disagreement with them) is that they are probably contrary to majority expert opinion. Furthermore, in my view, if you put a random sample of people in a situation where they were given the information they need to make informed decisions and ask them to justify their beliefs to an audience whom they could assume to be unbiased and interested in accuracy, then I think many of them would be likely to change their minds.

The main problem I have with moral foundations theory as presented by Jon Haidt is that it doesn’t seem to provide a basis for judging any particular moral feeling to be superior to any other. What basis do we have to say that it is silly for people to cling collectively to a set of irrational beliefs that is impoverishing them? What basis do we have to say that the sense of self-transcendence that a person might feel while engaging in meditation is superior to that which some other person might feel while taking part in a lynch mob? Haidt clearly doesn’t think all moral sentiments are equal, but there is nothing in his model that requires him to give calm philosophical reasoning a higher status than unprocessed emotions.

In my view, while social intuitionism tells us a great deal about morality, we should not disregard the importance of reason and rationality. In Steven Pinker’s discussion of these issues in ‘The Better Angels of Our Nature’ (pp 622 -642) he comes out in favour of Alan Fiske’s taxonomy which allows for a rational-legal  mode of social legitimation – a system of norms that is worked out by reason (utilitarianism plays an important role) and implemented by formal rules. Pinker argues that rational-legal reasoning can enable us to strategically deploy moral intuitions in benign ways.

The question that remains to be considered further is how we can employ our reasoning to deal more effectively with the problem of rational irrationality.

Postscript 1:

I have been having second thoughts about my statement that there is nothing in Haidt’s model that would cause him to give calm philosophical reasoning a higher status than unprocessed emotion. This might be an accurate statement, but it probably isn’t appropriate to criticize social psychology on the grounds that it doesn’t help people to make ethical judgements. I imagine that moral foundations theory might provide fairly accurate predictions of how different people would rank different self-transcendence experiences in terms of moral considerations. It also predicts that people are unlikely to cling to irrational beliefs that impoverish them when they have adequate incentives to seek the truth.

However, it seems to me that the role played by reason and rationality is sufficiently important for it to be recognized separately. Perhaps the evolutionary challenges faced in human evolution caused greater respect to be given to those who had a coherent set of moral intuitions, beliefs and behaviours (practical wisdom). There might be reproductive advantages in displaying practical wisdom (the virtue of prudence). In addition, tribes whose leaders showed greater practical wisdom might have adopted superior norms that would have given them an advantage in the struggle for survival. The story still remains essentially Humean or Hayekian, rather than a story about humans consciously constructing the building blocks of human progress.

Postscript 2:
I have also had further thoughts on the circumstances under which beliefs about sanctity could be said to be irrational.  The concept of irrationality seems to apply in relation to beliefs rather than personal values. For example, it might be possible for an individual to value a state-owned enterprise as a national icon without holding any irrational beliefs about it. 
However, Jon Haidt’s studies suggest that our values are likely to have a strong impact on our beliefs. People who view a state owned enterprise as a national icon would be more likely to hold irrational beliefs about what might happen if the enterprise is privatized. For example, they might over-estimate the potential for the enterprise to disappear once privatized, and under-estimate the potential net economic benefits arising from sale of the enterprise.


Some implications of moral foundations theory for social cooperation are discussed in a later post.

Do libertarians have a problem with empathy and disgust?

It seems to me that a high value should be placed on liberty because it enables people with different values to live in peace and to pursue their individual objectives in ways that are compatible and even mutually beneficial. This doesn’t make liberty the only ethical value that matters. It does mean, however, that the onus should rest squarely with those who seek to restrict liberty to show that this will result in net benefits in terms of human flourishing.

I would like to think those views make me a liberal, but that term has been hijacked by others (conservatives in Australia and egalitarians in the United States). I usually label myself as a libertarian, but if Walter Block’s discussion of whether Milton Friedman was a libertarian is definitive, then I definitely don’t qualify. I could not be described as an anarcho-capitalist or a minarchist (my spellchecker wanted to change that to monarchist, which would also be equally true, but beside the point). Perhaps my views could be described as ‘minarchism plus’, but the ‘plus’ involves a lot of things that Walter would consider to disqualify me from being classified as a libertarian. For example, I support government action to issue money that is not backed by gold, central bank control of monetary aggregates, some prudential regulation, a social welfare safety net providing for somewhat more than minimal subsistence needs, some environmental regulation, some anti-trust regulation and even democracy.

According to Walter Block’s classification that probably makes me a classical liberal rather than a libertarian, but I am not sure that Walter’s distinction between classical liberals and libertarians is widely accepted. Rather than attempting to define libertarianism from first principles it might be more appropriate to define it in terms of the values and beliefs of self-labelled libertarians.

Until recently I thought my values would be fairly consistent with those of most self-labelled libertarians. That was before I had read Jonathan Haidt’s book, ‘The Righteous Mind: Why good people are divided by politics and religion’ and competed some of the questionnaires on the YourMorals site. The research by Haidt and his colleagues shows, not surprisingly, that the view of fairness/reciprocity displayed by libertarians tends to place a high value on individual liberty. It also shows that libertarians tend to be much like conservatives in terms of issues related to harm/care and much like liberals on issues related to authority/respect and purity/sanctity. (A paper comparing the ethical values of libertarians with those of liberals and conservatives can be found here. The findings have been discussed by Ronald Bailey at reason.com.)

My values in relation to fairness/reciprocity seem to be similar to those of other libertarians, but I appear to be a bleeding heart liberal in terms of the harm/care foundation and a conservative in terms of purity/sanctity.  I think this may have to do with the difficulty of getting people to reveal their values, rather than a real difference in values. Many libertarians (and conservatives) may be reluctant to acknowledge that they feel sympathy for people suffering economic hardships because they are concerned that this might make them vulnerable to higher taxes. I don’t think it does. A decent safety net doesn’t have to involve high taxes if it is appropriately means tested and recipients of benefits are given appropriate incentives to look after themselves.

Something similar might apply in relation to purity/ sanctity. It is, of course, possible to view a behaviour as immoral and yet defend the right of an adult to choose to engage in it, provided that it doesn’t involve interference with the rights of other people. While completing the ‘Moral Foundations Questionnaire’, however, I felt some tension in acknowledging that some behaviour is immoral even though I felt disgusted by it. This makes me wonder whether libertarians (and other liberals) learn to cope with social conservatives who want to make immoral behaviours illegal by downplaying the link between imprudence and immorality. If you agree that disgusting behaviour is immoral, you know that social conservatives are likely to view such agreement as support for making the behaviours illegal. So it may seem to make sense to claim that the behaviour isn’t immoral because no-one is harmed except, perhaps, the person engaging in it.

I think the contraction of morality among liberals to issues relating to rights and obligations may be more apparent than real. Robert Skidelsky argued a couple of years ago that we (people in western societies) know ‘at some level’ that some things are ‘vile’, yet we no longer have ‘the authority and words to say so’. My response was that he had just said that a particular TV program was vile. There should be no problem in   anyone stating that they feel that a TV program, or anything else, is vile, disgusting or immoral. The problem is that some of us are reluctant to do this because social conservatives still want to make immorality illegal when no infringement of rights is involved.

I will return to a discussion of Jonathan Haidt’s book later. In my view it makes an important contribution to understanding of what is wrong with politics.

What are 'courts of common reason'?

‘Courts of Common Reason’ is the title of a book by Howard DeLong (Belcrest Press, second edition, 2011). The book has the subtitle: ‘Awakening the Spirit of 1776 to Form a More Perfect Union’.  DeLong argues that America’s political system falls short of the revolutionary democratic ideals of its founding fathers and suggests how current political practices could be revised to be consistent with those ideals.

The author proposes that a court of common reason be established to determine the ‘common reason of society’ - a phrase used by Thomas Jefferson. The term ‘court’ is used because the proposal involves establishing an advisory jury system, functioning in ‘a controlled setting typical of a court room with unbiased rules governing the presentation of evidence and arguments’ (p 172).

DeLong seems to me to do a good job of establishing that America’s founding fathers viewed democracy as involving more than just representative government. James Madison argued that ‘the cool and deliberate sense of the community ought, in all governments, and actually will, in all free governments, ultimately prevail over the views of its rulers’. He also asserted, however, that those to whom the people ‘intrust the management of their affairs’ should not be responsive ‘to every sudden breeze of passion, or to every transient impulse which the people may receive from the arts of men, who flatter their prejudices to betray their interests’. Madison would presumably be unimpressed by the tendency for modern politicians to pander to the breezes of passion reflected in public opinion polls.

DeLong’s main source of inspiration, however, is a proposal by Thomas Jefferson (in a letter to John Adams) for simultaneous meetings of wards (small political units within each county responsible for schools, police, roads etc.) to determine the common reason of society:

‘A general call of ward-meetings by their Wardens on the same day thro' the state would at any time produce the genuine sense of the people on any required point, and would enable the state to act in mass, as your people have so often done, and with so much effect, by their town meetings’.

The method which DeLong suggests for identifying the common reason of society would involve random selection of an advisory jury (comprising possibly 0.1% of the adult population) using methodology to mirror important population characteristics as accurately as possible. He envisages that the advisory jury would be divided into sub-juries, each consisting of 12 people, before listening to argument and deliberating. He suggests that the common reason of society would be revealed by the decisions of those sub-juries that achieve unanimity.

DeLong’s reason for proposing sub-juries of 12 people is to reduce the danger of groupthink or mob decision that he considers likely to pose a greater problem in large gatherings. His suggestion that sub-juries should be required to achieve unanimity for their view to be counted is intended to promote considered judgement. I can see merit in sub-juries small enough to enable all members to participate in the discussion, but it seems to me that the requirement for unanimity is too strong. As I see it, if 80% of sub-juries had 10 or more members in support of a proposition that would imply strong support, even if, say, only 50% of sub-juries were unanimous in their support. It would be unfortunate, however, to get bogged down at this point in the detail of how the proposal might be implemented, particularly since the author presents his proposals as a thought experiment.

The author bases his argument for institutional change on the view that the philosophy that common reason should have dominance is presupposed by the Declaration of Independence and the U.S. Constitution (including the Bill of Rights).  He suggests that readers ‘suppose, at least provisionally’ that that philosophy is ‘correct’ and asks: ‘What, then, ought we do to better embody that philosophy in our political practice?’

I am not entirely comfortable with that line of reasoning. What does ‘correct’ mean in this context? If it means that the people place high value on having governments serve the ‘common reason’ of society, then we should be asking what evidence there is that current practice falls short of that requirement. Relevant evidence could take two different forms: dissatisfaction with the extent to which democratic governments take account of public opinion in their decision-making processes; or the existence of a gap between public opinion and ‘common reason’ or ‘the cool and deliberate sense’ of the community.  It seems to me there is more evidence of a problem of the latter kind. If that is right, it means that the educative role of the courts of common reason would probably be more important than their role in bringing together information about the views of citizens.

DeLong seems to acknowledge that point when he writes:

‘ordinary polls hardly reveal the “cool and deliberate sense of the community” that should “ultimately prevail over the views of its rulers.” Most citizens have not even thought about many of the issues, much less reflected long and hard to determine their best judgement. What government officials need to know is: What would the American people think if they had the information, interest, time, and ability to consider political issues in a truly deliberative fashion’ (p 166).

I think the opportunity to participate in an advisory jury system that has a good chance of influencing the future directions of public policy would provide participants with incentives that would help overcome rational ignorance and the tendency for people to obtain their opinions from the 'tribes' they identify with. (See this article by Tom Harris for a discussion in the context of climate change policy). Payment for jury service would also help, but could make the exercise costly. DeLong leaves open the question of the length of jury service. There would be trade-offs involved in terms of acquisition of skills in deliberation on public policy issues, allowing participation by a larger proportion of the population and avoiding unnecessary disruption to lives and careers of citizens.

DeLong suggests that the questions and problems that might be put to advisory juries ‘are almost endless’. Examples he suggests include tax policy, medical malpractice liability, misleading advertising, pay rates for politicians, safety and environmental regulation, penalties for criminal offences, immigration policy and eminent domain policy. Towards the end of his book he also suggests that advisory juries could have a role in revision of the American constitution.

In my view Howard DeLong’s proposal for courts of common reason deserves serious consideration as a possible means of helping democracies to work better. It is obvious that the proposal requires more thought before it could be implemented, but it seems to me that people who are concerned about the current performance of democratic governments should be giving a great deal of thought to proposals such as this one.

What are Australians angry about?

In her recently published Quarterly Essay, ‘Great Expectations: Government, Entitlement and an Angry Nation’, Laura Tingle, political editor of the Financial Review, asserts that much of the culture and public discussion of Australians contains ‘some suspicion or assertion that we might be being ripped off, that someone else might be getting preferment’. I had two initial reactions. First, where is the evidence that Australians are more suspicious that they are being ripped off than are people in other countries with comparable living standards? Second, doesn’t Australia’s history of protectionism, crony capitalism and ongoing government support for anti-competitive union practices give us reason to be concerned that we might still be being ripped off?

However, Laura states her purpose as to explore ‘something wider’ than the reasons we have to be ‘underwhelmed by our politicians, by our institutions and by the quality of the services that government provides’. Her aim is to:

‘make the argument that as a nation, a polity, we have not sat down and worked out what exactly we expect “the government” – …  its administrative side, as well as the politicians of the day – to be and to do. We haven’t settled the idea of what we think we are “entitled” to get from government. The only things we seem to have been sure about over the years are that government has not met our great expectations that it will look after us, and that we are nonetheless entitled to be looked after’.

That reminded me of the message in ‘The Good Life and its Discontents’ by an American journalist, Robert Samuelson, published in the mid-1990s:

‘Responsibility poses choices, recognizes limits, and clarifies accountability. Entitlement denies choices, ignores limits, and muddles accountability. Properly construed, responsibility is a fundamental issue that all modern societies must answer in their own way. How much should people do for themselves and how much should government – that is, the people acting as a collective – do for them? What are the respective roles and competencies of individuals, families, social organizations, profit-making enterprises, and government? What answers best fit our traditions, values and common sense?’

Unfortunately, I don’t think the United States has taught us a great deal over the last couple of decades about how to answer those questions. The US still seems to be in the middle of what Samuelson described as ‘an ugly accommodation to reality’. (People who still see the US as characterized by small government may find this difficult to understand. They need to reconsider whether the US is actually characterized by small government. Size of government in the US is now greater than Australia. It would probably be more accurate to characterize the US as a country with inefficient government, rather than a country with small government.)

Much of Laura Tingle’s essay is designed to show that a sense of entitlement has played a strong role in Australia since its inception as a penal colony. The scarcity of labour in the colony apparently gave convict workers a great deal more power than slave labour would be expected to have. They were paid for finishing the job, rather than on the basis of hours worked and were allowed to earn private income when not at their government labours. Education was provided for the children of convicts. Emancipists had legal rights that ordinary people did not have in England at that time.

Laura also shows that disrespect for politicians has been a characteristic of Australia since the middle of the 19^th century when the franchise was extended to almost all adult males. She quotes John Hirst: ‘The people elected parliamentarians who could not look down on them and whom they did not have to look up to’.

The general picture that Laura presents of Australians tending to have an inherited sense of entitlement to be looked after by government is probably correct. Australia could certainly be viewed as an early starter in the ‘entitlement stakes’ – particularly welfare entitlements - and this may mean that more of us have a stronger sense of entitlement to middle class welfare than people in most other countries with comparable living standards.

Laura’s treatment of recent economic history suggests that if Australia is any better placed than any other countries in coming to terms with an entitlement culture this should be attributed to the efforts of the Hawke-Keating government i.e. the government in which Paul Keating was treasurer, rather than the later government in which he was prime minister.  Keating told Australians that they were living beyond their means and that reforms were needed to produce better outcomes for their kids and to provide economic security in the longer term.

Rather than painting a picture of the entire period of the Hawke-Keating and Howard-Costello governments as a reform era, Laura reminds us that the entitlement culture began to return while Keating was prime minister and was fuelled by the expansion of government spending under Howard and Costello. It was appropriate to be reminded that the Howard-Costello government was a big spending government - and only seems fiscally responsible in retrospect because of the strength of revenue growth associated with the mining boom at that time and the subsequent behaviour of the Rudd and Gillard governments.

So what does Laura have to say about Kevin Rudd:

‘Rudd was “Kevin from Queensland”, the bureaucratic nerd who was “here to help”. There was no more discussion about the withdrawal of the state. Government was not just here to give you hand-outs but, once again, to look after you properly. Rudd made public servants fashionable, even trendy. He spoke the incomprehensible language of bureaucracy, and for a time people found that engaging and endearing. Here was what we needed, someone who actually understood the system and could get it working for us’.

As Laura says, Kevin Rudd raised voters’ expectations to a risky degree. It wasn’t all that clear when he was elected in 2007, however, that this was happening. Some of his policies were certainly pie in the sky. It was stupid to propose a carbon trading scheme that was not conditional on action by other countries. The grocery watch and fuel watch schemes were obvious gimmicks. But there was some reason for hope that his ambitious proposals to sort out some of the problems associated with overlap of federal-state responsibilities might have worked. The main problem seemed to be that he turned out to be somewhat lacking in the management skills required of a prime minister.

Some people are angry that Rudd disappointed them. More seem to be angry that he was deposed by his party and that his successor seems incapable of keeping her own promises, let alone leading a government that is capable of living up to the inflated expectations created by Rudd. Some see Julia Gillard as acting like a puppet of the unions and the greens, while pretending to be an advocate of opportunity and responsibility. Laura suggests that there are other things Australians are angry about, including minority government and the uncertainty of the economic and political outlook. She writes:

‘It is wrong to see the anger of the last few years as a “one-off”, which might go away at the next election. The things we are angry about betray the changes that have been taking place over recent decades. As we have seen, politicians no longer control interest rates, the exchange rate, or wages … [etc.]. Voters are confused about what politicians can do for them in such a world. While the levers available to government to protect us have been removed, the expectation that we will still be protected has been fed by the failure of our politicians to explain their new impotence’.

I think Laura is about half right. People would still feel uncertain about the economic situation in Europe and the implications this might have for China and the Australian economy even if politicians still had control of all those ‘levers’. The security that government control of the ‘levers’ appeared to offer was just a mirage.  There are no levers that can enable governments to defy economic reality. And I don’t think uncertainty about the economic situation necessarily translates to anger with government. Good political leaders can win respect for government in uncertain times by taking the public into their confidence.

Laura is right about the need for political leaders to come clean and explain what governments are and are not capable of doing. It is a good sign that Joe Hockey, the shadow treasurer, has recently been making efforts to explain that we cannot have greater government services and more government involvement in our lives with significantly lower taxation. The big challenge posed by the entitlement culture that has developed in all high income countries, it seems to me, is in persuading middle-income earners that they should look after themselves rather than expect governments to accept responsibility for their happiness.

How should we assign weights to various aspects in the OECD's 'better life' index?

The second edition of the OECD’s ‘Better Life’ index is now available. As with the first edition, the index is presented in an interactive form.  Users are able to compare the quality of life in different OECD countries by assigning their own weights to a range of factors that are relevant to assessment of well-being.

When the first edition of the index came out I played around with it to see how different weighting systems and inclusion of additional information on factors, such as perceptions of freedom and corruption, might affect the comparisons. In order to make much difference I had to make some fairly extreme assumptions. My conclusion was that all well-being indicators tend to tell similar stories at a national level.

In this post I want to give some further consideration to the question of what weighting systems might be most appropriate. I want to allow for the possibility that because some of the factors included in the index measure similar aspects of well-being, there may be potential for users to inadvertently give excessive weight to the factors that seem important to them. For example, some people who assign a high weight to life satisfaction might also give high weight to factors that could be expected to have a strong influence on life satisfaction (e.g. jobs and work-life balance). That might mean that they end up giving excessive weight to factors that are strongly correlated with life satisfaction, at the expense of other factors (e.g. education and the environment).

The approach I have adopted in deciding on the weightings was to begin by giving highest weight (5/5) to safety (low crime), life satisfaction and the environment and then to assign weights to other factors depending on whether I consider their influence to be adequately reflected in the factors already covered. I have assigned a weight of 4/5 to income because I think high income adds to quality of life in ways that are not fully taken into account when people are asked whether they are satisfied with life (the value of the future security that a high income can provide). I have assigned a 4/5 weight to education because the contribution of education to quality of life may not be adequately reflected in either life satisfaction or income. Similar reasoning applies to community (covering support networks and volunteering). A weight of 3/5 is assigned to housing, jobs and health because these factors are already taken into account to a considerable extent in measures of life satisfaction and income. I have assigned a relatively low weighting (2/5) to civic engagement because important aspects of civic engagement are reflected in other factors (e.g. safety) and voter turnout seems to me to be a poor indicator of civic engagement in countries with compulsory voting. Finally, I have assigned a rating of 1/5 to work-life balance (rather than 0/5) because it might possibly cover some aspects of the quality of life that are not adequately reflected in other factors.

The ranking of countries according to the weights I have assigned can be found by clicking here. (The OECD offers a facility to embed it, but I am not clever enough to use it.)

The ranking according to my weights differs somewhat from the ranking if equal weights are assigned to all factors. The top five countries under my weights are: Australia, Switzerland, United States, Canada and Norway. With equal weighting, the top five countries are: Australia, Norway, United States, Sweden and Denmark.

However, this difference in rankings doesn’t mean a great deal because the difference in ratings of the top ranked countries is small. That doesn’t surprise me - all well-being indicators tend to tell similar stories at a national level! 

Are citizens' juries susceptible to groupthink?

In my last post I considered the question of whether citizens’ juries might help to lift public debate on issues which professional politicians find difficult to deal with. After looking at the process involved in a citizens’ jury on container deposit legislation, I concluded that it was likely to be particularly important for citizens’ juries to be asked the right questions.

The post provoked two different responses. Evan suggested that citizens’ juries could make a valuable input to policy, but there was a problem of legitimization i.e. the process required government backing. Anon (kvd) asked why it was necessary to place between ‘the people’ and their elected representatives a layer of ‘non-responsible, unelected, single-issue, unaccountable’ citizens’ juries. My response was that I agreed with both Evan and kvd, but what I meant was that both had raised good points. Citizens’ juries would certainly need to be seen to have legitimacy in order to have the desired effect on public debate. And the onus should certainly be on those who propose such innovations to show why they are necessary and are likely to succeed.

I think we should be looking for innovations to make the democratic systems work better because there is a tendency for democratic governments to over-reach – to raise public expectations of what they can achieve and to take on more responsibilities than they are able to cope with. This is reflected to some extent in the tendency for many governments to take on excessive debts, but I see the problem as much broader than that. I will write more about that at a later stage.

 I have had an interesting discussion with Shona (the person who suggested last year that it might be a good idea to think up a new political system) about the possibility that citizens’ juries might be susceptible to groupthink. The discussion arose because of the example in my last post of a citizens’ jury coming to a unanimous decision, while successive polls looking at the same issue found that support for the proposal diminished after provision of information to participants. Shona suggested that I should take a look at the relevant chapters of Stuart Sutherland’s book, ‘Irrationality’.

Sutherland makes the point that not only do people tend to conform to majority decisions but group attitudes tend also to be more extreme than those of individuals. Rather than the attitudes of each member of the group tending toward a mid-position, as members of the group interact they tend toward a more extreme position. One possible reason is that if the group attitude is tending in one direction, individual members may express more extreme views in order to gain approval from other members. Another possible reason is that the group is willing to take greater risks than its individual members because membership of the group spreads responsibility.

Research relating to legal juries suggests that conformity to majority views is common. For example, a US study by Nicole Waters and Valerie Hans indicates that while about 6 percent of criminal juries fail to reach unanimity over one-third of  jurors say that if the decision had been entirely up to them they would have voted against the jury’s decision.

The potential for members of citizens’ juries to conform to majority decisions and for group decisions to become polarised has been recognized by some researchers in this field. For example, R K Blamey, P McCarthy and R Smith of the ANU discussed these issues in their paper ‘Citizens’Juries and Small-group Decision-making’. The authors conclude that the fact that citizens’ juries are susceptible to biases does not necessarily mean that individual-based decision-making (e.g. via opinion surveys) should be preferred. They make various recommendations designed to minimize the weaknesses of group processes and to maximize their strengths.

There are some situations where the tendency of small groups to conform to majority decisions is desirable. For example, a fairly high degree of conformity to group decisions is required for a system of cabinet government to work effectively. It seems to me, however, that the tendencies for bias discussed above would pose substantial problems in using citizens’ juries in the manner I had contemplated. There is a good chance that the outcome of a citizens’ jury process would not be representatives of the views that a group of randomly chosen group of citizens would come to if they had the opportunity to consider an issue independently. 

What questions should citizen's juries be asked?

Since writing on the question of whether citizen’s juries might be better than focus groups I have been thinking more about the kinds of questions a randomly selected group of citizens could usefully deliberate upon. The answer probably depends on the objective of the process.

When Gordon Brown became prime minister of Britain in 2007 he announced citizen’s juries as his ‘new big idea’. It seems from his speech announcing the policy initiative that his aim was to improve communication between his government and the general public. His emphasis was on new ways of listening to people, consulting on new ideas and engaging in a dialogue and deliberation. He attended some of these citizen’s juries himself. An internet search indicates that the response at the time ranged from strong support to cynical suggestions that his motive might have to obtain more photo opportunities. Remarkably, within about a year the big new idea seems to have vanished without leaving a trace on the internet. I don’t know what happened. It is odd that there doesn’t seem to have been a public post mortem about what went wrong (or right) with the process. My guess is that the novelty of listening and consulting might have worn off.

It seems to me that the most useful objective of citizen’s juries would be to influence public opinion by providing a considered point of view that people might consider more trustworthy than the views of political leaders, interest groups or experts making judgements outside their areas of competence.  In other words, this process might help to address the combination of rational ignorance and hubris (or narcissism or whatever) that tends to lower the level of public debate on policy issues.

So, what types of questions might usefully be put to citizen’s juries? In my view the relevant questions would arise mainly from the issues that professional politicians find difficult to deal with because public opinion is ill-informed or unstable. Establishing citizen’s juries to look at such issues could be viewed as experiments to help a government to decide whether to take the political risks involved in introducing reforms.

I am not sure to what extent citizen’s juries have previously been viewed in that light. From the little I have read on the topic, the inclusion of unorganized citizens in policy processes is often seen as a desirable end in itself.

Greg Cutbush, a visiting economist at ANU Enterprise, responded to my last post by suggesting that before I get too enthusiastic about citizen’s juries I should take a look at a citizen’s forum on a proposal for a container deposit scheme in New South Wales.

In brief, the citizen’s forum was part of a review of container deposit legislation conducted by Stuart White of the Institute for Sustainable Futures at UTS in 2001. Other parts of the review included a cost benefit study of container deposit legislation (CDL), stakeholder and community consultations and a ‘televote’.  The ‘televote’ involved two polls, the second of which followed provision to respondents of ‘balanced written information on the various arguments in favour and against CDL’. The eleven members of the citizen’s forum were provided with essentially the same written information, presentations from government officials and independent CDL experts, as well as exposure to three days of deliberation.

As a result of the provision of information in the televote process, support for CDL fell from 71 percent to 59 percent. By contrast, the citizen’s forum unanimously agreed to the implementation of CDL. I wonder whether the emergence of consensus reflects the impact of three days of deliberation.

In the aftermath of the exercise one member of the project team, Carolyn Hendriks, commented:

‘The introduction of new players to the policy debate, particularly in terms of their representativeness and legitimacy, was one of the key concerns raised by the interest groups in a recent Australian citizens jury held on Container Deposit Legislation (CDL). There were two key issues here. Firstly, interest groups questioned the capacity of ordinary citizens to comprehend their arguments. Secondly, most of the CDL interest groups saw themselves as the only legitimate stakeholders. According to this viewpoint, citizens with an opinion or interest in the issue can only enter the policy debate via a valid group. Extending public participation to virtual stakeholders such as lay citizens appeared to insult interest groups because it down-played their expertise and their long-term investment in the issue.’

The problem she alludes to was the withdrawal of some stakeholders from making presentations to the citizen’s forum, which necessitated reliance on written material. It is not clear whether this had any impact on the outcome of the deliberation process.

However, I have doubts about the value of the whole exercise because it isn’t clear that participants in the forum were asked the most appropriate question. As pointed out by Access Economics, in its review of the White report, the question of how best can governments increase recycling rates requires a ranking of CDL against other feasible options rather than an a consideration of whether a CDL scheme might be better than the status quo.

If citizen’s juries are asked the wrong questions they might reach unanimity about matters that are not particularly relevant to the policy choices that governments have to make. 

Would a citizen's jury produce a better policy outcome than a focus group?

In an article published on his blog last Sunday Jim Belshaw argued that risk management by governments has come to focus too heavily on political risk avoidance because of concerns that a more balanced approach would be too difficult to sell to the public. As a generalization, I think the point is correct. It is possible to cite a few examples of recent Australian governments taking excessive risks (e.g. the infamous home insulation and school hall construction programs). In my view, however, the Hawke, Keating and Howard governments showed stronger leadership than those that have followed and were less prone to allow focus groups, polling and brainstorming on talk back radio and twitter to set the political agenda.

That is just a personal impression. It is difficult to cite hard evidence. Mike Steketee provided some examples in support of the view that poll-driven policies have become more common in an article in ‘The Australian’last year. In my view the strongest point he made, however, was to quote Rod Cameron, a veteran pollster, who has observed that politicians are now more inclined to accept the prejudice and narrow-minded bigotry coming out of focus groups as a basis for policy, rather than to seek to neutralize such views.

Irrespective of whether Australian governments have become more poll-driven in recent years, the temptation for governments to opt for politically safe options rather than those requiring courageous political leadership exists in all countries in which public opinion counts for anything. In many instances, of course, the politically safer option is much more risky in the longer term. In my view that makes it preferable to have a system of government in which it is clear which political parties are accountable for the decisions that are made or not made by governments, rather than proportional representation, in which responsibility is shared by the centre right and centre left - and the only parties that have clean hands are the extremists at either end of the political spectrum. I have in mind the situation in Greece, of course, but I am straying from the topic I want to write about.

Coming back to the importance of political leadership, I remember a conversation that I had with a wise person about 20 years ago. I made the point that Australia needed more courageous political leadership to pursue economic reforms. I expected the wise person to agree, but his response was that those who want governments to pursue economic reforms need to accept that governments don’t lead, they follow. The point he was making was that it is important to keep in mind that political leaders can never get far ahead of public opinion. The leader who prepares the ground for reform by attempting to raise the level of public discussion of an issue will often be more successful in promoting reform than the one who shows great courage in attempting to forge ahead ignoring ill-informed public opposition.

So, how should those who aspire to leadership seek to raise the level of public discussion of issues? One method that has had some success in Australia is the system of independent policy advice provided by the Productivity Commission and some of its predecessor organizations. The strength of that system - as Gary Banks, the chairman of the Commission, pointed out in a speech last year - has been the independence of the Commission, the process of public scrutiny of underlying research and analysis before the advice is submitted to government, and the educative role of the organization in helping to promote a broader understanding of issues and advocating initiatives to the public and parliament.

However, it has not been possible for the Productivity Commission to be as effective as it should be. In an interview with Alan Mitchell in the Australian Financial Review a couple of months ago (10 March) Bill Carmichael, member of the Tasman Transparency Group and former chairman of the Industries Assistance Commission, suggested that the Rudd and Gillard governments had sidelined the Productivity Commission as an independent advisor on microeconomic reform:

‘They have created a plethora of carefully selected inquiries and institutional arrangements designed to minimize bothersome critical analysis and produce outcomes more to their liking’.

The report of the interview ended with Bill Carmichael suggesting that political leadership is ‘a quality that has been missing from the present debate about economic reform’. An element of leadership is clearly required to move forward on difficult issues, even with the help of sensible public inquiry processes.

So, could citizen’s juries help to compensate for weak political leadership? According to Nick Gruen, in the transcript of an ABCbroadcast in which he spoke about ‘deepening democracy in the internet age’, a citizen’s jury or consensus conference is ‘a small jury-sized randomly selected group’ which ‘deliberates at length’ on policy issues. The body hears evidence from professional experts and advocates, and its conclusions are published.

It seems to me that the potential benefit of such a system would lie mainly in helping to lift the level of public debate on contentious issues, by providing members of the public with a point of view that they might consider more trustworthy than the partisan views of political leaders, or judgements of experts who might seem to be out of touch with the values of ordinary people. Citizen’s juries would certainly not be a substitute for sensible public inquiry processes, but they might help avoid policy development being placed at the mercy of focus groups and political point scoring. Citizen’s juries could perhaps be particularly helpful in development of policies that involve important value judgements e.g. deciding appropriate levels of immigration.

I will write more about citizen’s juries later.

What is the case for government funding of mitigation research?

I ended a recent post by suggesting that serious consideration should be given to Bjorn Lomborg’s view that mitigation of climate change is likely to require a substantial increase in government funding of relevant research.

   

That position is somewhat at odds with a view that I have held for a long time that governments should stay out of the business of trying to pick technological winners by funding research and development. I acknowledge the case for public funding of basic research on grounds that it is a public good that would not be adequately supplied via the normal operation of market forces. If someone suggests, however, that governments should become heavily involved in funding of research into alternative energy because the world is running out of cheap sources of fossil fuels, I would regard that as a fairly silly idea. When the world does start running out of cheap sources of fossil fuels the prices of those resources can be expected to rise, providing a strong market incentive for private sector investment in research into alternative energy sources.

So, what grounds are there to argue that carbon taxes and emissions trading schemes that impose a cost on carbon emissions will not have a similar effect on research incentives? I don’t see any. In both cases, as the production of energy through conventional use of fossil fuels becomes more expensive the market should provide adequate incentives for research.

The case for substantial government involvement in funding of research directed toward mitigation of climate change cannot rest on arguments that apply to equally to many other forms of research, even though some eminent economists may think it does. For example, Ross Garnaut argues (in Chapter 9 of his 2011 climate change report) that ‘the carbon price alone will not lead to adequate investment in research, development and commercialisation of new technologies, because the private investor can capture only part of the benefits’. Similar externalities apply, of course, to a wide range of research, development and commercialization activities throughout the economy. Perhaps the existence of such externalities warrants some government assistance to industry, such as allowing capital spending on research and innovation to be treated for tax purposes as a current rather than capital expenditure.  It might also warrant some government involvement in funding of development rather than just basic research, particularly since it is often difficult to draw a line between R and D. But it would be difficult to justify the large increase in tax – and associated economic costs – which would be required to embark on a major program of government funding of research, development and commercialization of new technologies in all sectors of the economy.

It seems to me that the case for substantial government involvement in funding of research directed toward mitigation of climate change must rest on a form of government failure (the difficulty of obtaining international agreement for concerted action) rather than on market failure (or externalities). If governments were able to agree to an appropriate carbon price the case for additional government funding of research would disappear.

Bjorn Lomborg seems to be on strong grounds in arguing that international agreements to invest in research and development are likely to have a greater chance of success than carbon-reduction negotiations. Wealthy countries are less likely to object to making greater research contributions. Agreements to fund more research may also be seen as likely to make it easier to negotiate future carbon reductions by reducing the cost margin between existing fossil fuel technologies and less polluting technologies.

However, there is potential for gradual mitigation to continue to occur even in the absence of international agreements. Governments of countries with high per capita emissions will continue to come under political pressure – from internal and external sources - to reduce greenhouse gas emissions. Perhaps the most likely outcome is that the world will stumble on toward a reduction in greenhouse gas emissions, relative to what would otherwise occur. The climate will nevertheless continue to change. This may impose high costs on some people (those faced with high adaptation costs relative to their current income levels) and benefits to some others. But the general story might be one of successful adaptation.

If that is the most likely scenario, it would make sense to view increased government involvement in research to mitigate climate change as a precautionary measure. It is probably worth doing even though it will, hopefully, not be necessary. Imagine a scenario where climate change accelerates and costs of adaptation begin to rise steeply. My guess is that in that situation, international agreement would be reached fairly quickly by the United States, China and Europe to cut emissions of greenhouse gases drastically and take steps to ensure that other countries do likewise. The economic cost of such reductions in emissions will be very high if there is still a substantial cost margin between energy generated using conventional fossil fuel technologies and cleaner technologies.

So, it seems to me that the case for substantial government involvement in funding of research to mitigate climate change is largely precautionary. It is in our interests to reduce the risk that will be posed to our standard of living if we have to make sharp reductions in greenhouse gas emissions at some later stage.