Sunday, 5 August 2012

Boarding Up the Overton Window




On Incentives in Political Systems

There is a vocal consensus that the American political system is more polarised than ever before. I think, though, that this is partly endemic to the way it is designed. For all that the founding fathers naïvely assumed that partisanship would not invade their political institutions, the structure of the establishment rewards political extremism far more than it does in the parliamentary systems of Europe.

Imagine, for example, that all policy sits on a single left-right continuum. You are a moderately right-wing voter, and current policy is in the ‘centre.’ You want to shift policy towards your chosen position. In the UK, where the ruling party gets to do basically whatever it wants, your strategy is simple – vote for the party which most closely represents your political position. That makes them more likely to win and, in so doing, implement your preferred policies. Voting for a party whose policies are to the right of yours doesn’t help, because you get a different set of policies you disagree with (although you do get to ‘kick the bums out’).

By contrast, in the USA, most meaningful policy changes rely on some degree of bipartisan compromise. If you vote for the politicians who best represent your views, then the moderate right-wingers you elect will end up compromising with the moderate left-wingers other people elect, and you’ll end up with policy… in the centre, where you don’t want it to be. Your best chance, then, is to vote for a far-right candidate, in the hope that they will drag the consensus view closer to your own preferred position. The Democrats want to raise taxes, your candidate wants to abolish the government, and you end up with the tax cut you were hoping for all along.

Political polarisation is exacerbated by the decentralised structure of American political parties. The primary system, and the relative independence of state and local parties, mean that voters have a much more direct influence on the political orientation of their chosen party. By selecting ever more conservative candidates, Republican primary voters have managed to shift the party ever more to the right. Moreover, they have been able to hold their representatives to account on issues like Grover Norquist’s pledge not to raise taxes. By contrast, candidates in Europe are largely selected by their party, and a voter’s only way to punish their party’s ideological purity is to vote for someone else. Extremist parties, however, are strongly penalised by most European systems. Germany, for instance, only allocates federal parliamentary seats to parties that get at least 5% of the vote. Britain is an even starker example. The UK Independence Party, which runs on an aggressively Eurosceptic and anti-immigration platform, won no House of Commons seats in 2010, despite doubling its share of the vote to 3% relative to three years earlier. The Tea Party, on the other hand, has had much more mainstream success, because it has been able to work within the Republican party and exploit its existing campaign apparatus and political legitimacy.

The upshot of all this is that America’s voters are much more able to control the positions of their chosen political party, and they have much stronger incentives to use that control to make their party more extreme. One interesting question is why this has had much stronger effects on the right than on the left. There is no real equivalent to the Tea Party on the Democratic side, with Dennis Kucinich basically alone on the lunatic fringe. Partly this is because progressives rarely have grassroots support. Perhaps the extreme left’s base is inherently disorganised; more likely, they are just much less inclined to engage with conventional politics, in stark contrast to the Tea Party’s constitution-worship and success in working through the traditional establishment. Maybe it is that rural areas provide the best breeding grounds for extremism, and the Democrats are strongest amongst urban populations who quite like their rampant consumerist lifestyles, thank you very much. Most high-profile progressives, notably, hail from the Midwest rather than the North-east.

And maybe it’s just that the American Overton Window of acceptable policy has already shifted so far that carbon taxes are just as much a fringe policy as abolishing the EPA, and fiscal stimulus is seen as no less extreme an economic policy than abolishing the Federal Reserve.