An Economic Theory of Democracy

Chapter 12 discusses how citizens can find more efficient means of procuring information. Society often has free sources of information, requiring only the time necessary to consume them. Such sources may come from the government, political parties, interest groups, or entertainment sources with politically relevant content. For those who utilize such sources, they tend to form a baseline from which they decide whether to pursue more information at greater cost. Not everyone can use such sources, based on the amount of free time at their disposal and how they choose to spend it. Also, some forms of work bring others into greater levels of contact with free information than others. Political information also requires concentration in the hands of a few specialists and areas of decision. Specialists may include professional gatherers of information, such as journalists or academics, interest groups, political parties, and the government itself. In judging among these sources, the voter can reduce their information costs to spend less time learning or delegate the task of learning to others. They can also find more efficient sources of free information, such as well-informed friends, so that the enjoyment of a conversation accompanies the costs of learning. Subsidized public data may also be valuable, but there is no guarantee that its selection principles will match that of the voter. They can also delegate to an expert, especially one with professional credentials, but they should put in the effort to see if that person’s judgments have been wise before committing additional resources.

Downs cites the hypothetical example of one person charged with picking the governing party for the next election period. If someone else is better informed, it is entirely rational to delegate that decision entirely to the other person, provided one can trust the decision of that person’s superior competence. Similarly, a voter may vote for a party having done very little research if they already know that the party is most likely to advance the goals they value, meaning that they have already done the work to establish that party as trustworthy. Different forms of contextual knowledge provide a better foundation for acquiring information cheaply, such as education or past experiences, as well as the ability to find sources that align with the voter’s selection principles. Also, since mass media outlets are largely owned by wealthy people, consumers are likely to have their information skewed by the selection principles of the wealthy. Differences in the level of information are tightly connected to differences in social power.

Chapter 13 examines how information can translate into decision-making and political influence. The most passionate voters need the least amount of information, the least passionate do not desire information, and the majority in the middle are generally reluctant to acquire non-free information. Yet even the indifferent voter must learn enough to justify their conclusion that there is no difference between the parties, or else their apathy is irrational. The voter needs the information which might cause them to change their mind about which party to support. It is difficult for a voter to know in advance how much to expend on a piece of information which may or may not swing their opinion. Those committed to one party are unlikely to incur the high information costs necessary to change their mind, just as those who do not care lack the motivation to adopt a more committed attitude. A person will also calculate the value of their vote and, if they don’t believe their vote matters, it will further discourage them from paying the costs of acquiring information. Downs concludes that it is rational for most voters not to waste their time acquiring information when they perceive this as more valuable than their actual vote. This conclusion contrasts starkly with the general preference in a democracy for a well-informed citizenry: The idea of every vote mattering is a matter of democratic faith rather than fact, and there is nothing that a free government can do to compel its citizens to become better-informed.

In formulating policies, governments will attempt to discern the preferences of its citizens, and it is easiest to detect the preferences of those who are most passionate about an issue and able to express their views clearly. The government spares itself information costs by following these influencers, rather than taking the effort to learn the preferences of those who either cannot or will not communicate them freely. For their part, influencers must decide whether the cost of intervening is worth the change in policy. This in turn requires knowledge of which other citizens are trying to influence policy, and in which direction. The influencer may not know which policy will benefit them, and even if they do, whether the intervention will do anything to benefit them. Unlike the voter who has a built-in mechanism to express their view, however modest its effects, the influencer must find a way to communicate their view directly to the government. The risk is that they spend an enormous amount of time and effort without reaching anyone who can implement their preferences. Influencers also have to worry that other influencers have better means of communicating their own preferences, especially specific information which will dissuade the government from pursuing any other path. This is a far more complex set of circumstances than that facing the voter; only a handful of specialists will have the knowledge and willingness to undertake the requisite work. One major conclusion Downs draws from his analysis is that producers have an advantage over consumers in influencing policy, as producers have access to inside information, in addition to generally being wealthier. Consumers are much less able to coordinate their own preferences, and so the government is not likely to directly pursue their interests even if consumers compose an overwhelming majority of the population. Even though it is typical to define democracy as government by the consent of the governed, in practice it is closer to decision-making based on the preference of those affected by policies to the degree to which it affects them. Since producers are the most affected by economic policy, they have the greatest influence. Democracy may very well be more equitable than other systems, but the aggregate behavior of rational actors will not result in equality.

Chapter 14 examines the conditions under which abstention is rational and attempts to appraise its impact on the distribution of power” (260). If there is no cost to voting, only the indifferent will abstain. When there are costs to voting, some otherwise motivated people will decide it is not worth the effort, and they are disproportionately likely to be low-income people. When voting is costless, some will choose to vote even if they lack strong preferences, because voting is necessary for a democratic system to endure. However, the mere form of democracy is not enough for voting to be rational; a voter must care about the outcome. The system can sustain a great deal of indifference, but it is preferable for the ranks of the indifferent to shift from one election to the next. Also, not all forms of indifference are the same. Voters may be equally repelled by all parties, or equally satisfied. Voters may have latent preferences which they do not understand due to lack of information. More information may not raise a voter’s commitment, but it will make them less liable to change their behavior.

When there are costs or barriers to voting, in terms of learning the issues or casting a ballot, even some partisan voters will stay home. There is also class-based consequence, as the “ability to bear these costs varies inversely with income, so upper-income citizens have an advantage” (266). Some may have to pay for travel, or lose time earning wages in order to vote. Even if these costs are marginal in and of themselves, they may outweigh the similarly marginal benefits of voting. Paradoxically, the more citizens convince themselves that their vote does not matter, and thus stay home, the more important the actual votes cast. The more that citizens become aware of this, the more will vote, and the value will diminish again. Voting can still be rational to the extent that voters are investing in the healthy functioning of a democracy for its own sake, not necessarily to produce a specific outcome. In Downs’s words, they share a “desire to see democracy work” (268). They may do so even without becoming informed, since letting democracy collapse is presumably worse than the victory of any particular party. Yet even though all benefit from democracy, some will invariably vote and others will invariably abstain. Revising the model of rational voting from Chapter 3 of the book, Downs proposes that the rational voter evaluates the difference between party platforms, the costs of voting, value of democratic institutions, and expected number of other voters. Indifference with regard to the parties may not deter voting if there is sufficient support for democracy, as well as a general preference for change or no change. If they only care about democracy, they will vote without regard for whom. Preference for one party or another will be measured against the costs of voting and the likely impact of one’s vote given the size of the electorate. This should give an advantage to motivated partisans, who concentrate their votes while others vote at random, spoil their ballot, or do not vote at all. Low-income citizens will struggle to overcome barriers to both voting and information, decreasing their overall voting power and contributing still more to the inequities within a democracy.