Is Low Voter Turnout a Bad Thing?

This is a question worth pondering for Americans about to have an election, Canadians who are just recovering from one, and really anyone who has encouraged a reluctant would-be voter to cast a ballot.

Will Wilkinson of the Cato Institute, reflecting on the level of participation in Canada's election (~59%), makes the case that low voter turnout could in fact "signal social solidarity, reflect real civic virtue, and even make democracy work better." How's that? Wilkinson argues that it is not simply your civic duty to vote, but to vote well - as in, voting for politicians that will implement policies that make society better off. Given that many people are largely ignorant of the issues and too busy to research them, abstaining from voting can help to maintain the public good.

But doesn't that mean that, like what I imagine happens at school board meetings, only the people with something to complain about show up? Would that not make elections even more partisan and divisive? Apparently not. According to research quoted in the article, voters of all stripes tend to vote in good faith to promote the public good rather than purely out of economic self-interest. Following this logic, those least able to determine the appropriate policies (re: the uninformed, lazy, or otherwise occupied) should stay home.

Interesting thought. But I would add to this by saying that, even though people think they are voting for the public good, they may not be at all. The classic case is protectionism: "protecting" the country's economy feels like a good idea, but Economics 101 shows how, in most cases, freer trade makes society better off. The academic debate over the value of comparative advantage focuses on the degree of benefit, not the principle itself. Yet despite this, voters consistently vote for protectionist policies. In other words, what voters want and what they vote for are frequently opposites.

I've been reading Bryan Caplan's The Myth of the Rational Voter this past week, and he argues that voters are "rationally irrational." Because the odds of casting a deciding vote in a national election is effectively zero*, it doesn't make sense to spend a lot of time researching the best policies.

"Since delusional political beliefs are free, the voter consumes until he reaches his "satiation point," believing whatever makes him feel best. When a person puts on his voting hat, he does not have to give up practical efficacy in exchange for self-image, because he has no practical efficacy to give up in the first place." (132, original italics)

If you make a bad decision in the marketplace, you pay a price and have an incentive to make better choices. If you make a bad decision in a voting booth, the cost is spread out across the whole population and you have no incentive to make better choices. So, even if Wilkinson is right, voter turnout would have to be minuscule for the effects of rational irrationality to be muted.

This means that, since we're much too fond of our democratic freedoms to restrict voting or have a poll tax, we should expect elections to produce sub-optimal results. And if you're looking for proof, look no further than the latest election coverage.

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*Actually, in the last US Presidential election, each vote impacted the outcome by 0.000000949%.
"Swish that around in your mouth for a while. How does it taste? Taste like freedom? 'Cause to me it tastes like jack-all squat." - Stephen Colbert, America: A Citizen's Guide to Democracy Inaction

Liberal and Conservative Party Platforms: Int'l Perspective, part II: Environment

I have been patiently waiting for the release of the Conservative party platform to continue with this series on the election issues in Canada from an international perspective, but it appears that I am waiting in vain. It's shocking that a party can run for re-election without a platform, but so be it. All I can say is that, given the popularity of part 1, even as the media focuses on the personality-cult of election campaigns, people are actively searching out the positions of the political parties on their own - that's encouraging.

So today I will be looking at the Liberal and Conservative positions on the environment & taxation - specifically, how each party plans to spread the cost of meeting emissions targets. Taxation and environmental policies are crucial both for Canada's economic competitiveness in attracting foreign investment and rebuilding its moral authority at multilateral negotiations. Also, regardless of which plan is implemented, it will serve as an important model for other countries to study, for better or worse.

The Conservatives
The Conservatives' environmental plan amounts to a cap-and-trade system. Andrew Coyne has an excellent summary of the plan here. Emissions are "capped" at a certain level; firms that cut emissions below the cap can earn credits on the surplus; firms that exceed the cap must buy up credits from the surplus market. Alternatively, firms buy credits on the international market or contribute to a "green technology fund."

The goal is to reduce emissions by 20% by 2020, using 2006 as the baseline. Make no mistake, said Stephen Harper in 2007, this regulatory framework will create "very real costs" and result in "noticeable price increases for consumer products such as vehicles, natural gas, electricity, and household appliances." As Coyne rightly points out, we're not hearing much about those costs anymore.

The Liberals
In a nutshell, the Grits' Green Shift amounts to a carbon tax: greenhouse gas (GHG) emissions will be priced at $10/tonne, rising another $10/year until it reaches $40/tonne. To offset this carbon tax, the Liberals promise to cut income taxes for the lowest bracket from 15 to 13.5%, and the income taxes of the middle brackets from 22% and 26% to 21% and 25%, respectively. Small businesses get an additional 1% cut, and there will be further undefined incentives for green technology.

The Liberal target is also a 20% reduction by 2020, but they're using 1990 as the benchmark - so, a more ambitious target.

Analysis
As LSE's own maver-economist, Willem Buiter, points out: from an economic perspective, a cap-and-trade system is equivalent to a carbon tax. Both a market cap and a carbon tax raise the marginal cost of GHG emissions. Those with a low marginal cost will expand their activities, those with a high marginal cost will reduce them. The biggest difference is that, under a carbon tax, the price of carbon is set at X and firms trade amongst themselves. Under a cap & trade, the total amount of emissions is set, permits are auctioned off, the secondary market establishes a price, and the firms trade amongst themselves.

However, Buiter qualifies the equivalence:

An argument in favour of carbon taxes over cap & trade is that cap & trade requires an efficient secondary market. As we know from recent experience, financial market efficiency cannot be taken for granted.... In a world with uncertainty but incomplete markets, the carbon tax and cap & trade are similar but not equivalent; neither one obviously dominates the other under all circumstances.

The main trade-off is knowing the price of carbon vs. knowing the amount of GHG emissions. From a business perspective, I would imagine the prospect of a tax is discouraging, but the certainty of the costs allows for more accurate business modeling. On the other hand, the cap-and-trade system is more obscure than a tax, which makes it popular for politicians.

In both cases, revenue is generated for the government that can be used or abused as they see fit. I will finish by summarizing Andrew Coyne's analysis, which neatly outlines the flaws in both plans.

Conservatives

• The plan is "just as costly as the Liberals'... twice as complicated...and probably half as effective." Indeed, leading climate experts agree that even the modest targets set by the Tories will not be met.
• Ironically, given the Conservatives' 2006 platform, the cap & trade is less transparent than the carbon tax
• The plan is infinitely less politically risky than the Liberals', which also makes it more likely to be implemented

Liberals

• The plan is not radical enough, but costly enough to annoy everyone.
• Libs haven't explained how they will apply the carbon tax to provinces that already have one, and have not promised to cut income taxes by anything near enough to make this revenue neutral, as promised.
• The details are fuzzy, and a tax is politically unpalatable, making its implementation (especially in a minority government situation) far less likely.

The Conservative & Liberal Party Platforms: International Perspective, part I

(Another Update, Oct 3 - part II on the environment is here)
(Update, Sep 30 - An earlier version of this essay included a specific Tory promise on immigration that was incorrect and has been removed. The full Conservative platform has not yet been released. I'm using press releases, the 2006 platform, the 2007 throne speech, and the National Post article which lists all promises made thus far. It's all we've got, people).

The humble scribblers here at le Journale have made a conscious effort to avoid commenting on the ups and downs of election campaigns, but exceptions are made for issues relating directly to international political economy. Earlier, Rory took issue with the suggestion that a certain US VP candidate's lack of international experience was not a significant matter, or worse: an asset. He argued that it's simply not acceptable for the executive branch of government to be out of touch with global issues when so many of our greatest challenges don't respect national borders. Agreed.

Well, Jeffrey Simpson has pointed to a similar worrying trend up here in Canada: the current election campaign is proceeding along as if the rest of the world doesn't exist. Normally I would insert a self-depreciating joke about how the rest of the world doesn't know Canada exists, but this is patently untrue: Canada is regularly referenced as a model for immigration, health care, multiculturalism, internationalist foreign policy, environmental issues and the like. The sad part is, most of these stereotypes do not hold up well to scrutiny. Canada has one of the worst greenhouse gas emissions rates per capita, our foreign relations have been on a downward trend of late, as have our trading relations and levels of foreign aid. Meanwhile, with the effects of the American recession seeping across the border, the importance of attracting international investment and workers to maintain growth and innovation is more important than ever.

So, with that in mind, I'm going to dig into the policies of the two parties most likely to win the election - the ruling Conservative Party and the rival Liberal Party - to examine the future outlook for foreign countries, firms, and citizens who expect to be dealing with the Canadian government over the next few years. Today's themes will be immigration and trade.

Immigration
Canada's ability (and willingness) to attract foreign workers represents a huge economic advantage over the United States. The American H-1B temporary working visas are capped at 65,000 per year (!), which makes doing business in the United States considerably more challenging. This has led firms like Microsoft to re-locate north of the border. What are the two main political parties promising to do about immigration?

Conservatives: Quite frankly, not much. By and large, multiculturalism doesn't jive well with the Conservative's emphasis on 'Canadian values,' but to ignore the fact that immigration is a driving force in the competitiveness of the Canadian economy also doesn't fit with their message of economic responsibility.

Liberals: This party has always had a strong emphasis on attracting new immigrants and on the benefits of multiculturalism. Their promises include a new program to facilitate temp workers and international students gain residency, as well as a re-tooling of our immigration points system to emphasize the skilled trades.

Verdict: Liberals look stronger.

Trade
Quick facts: exports account for roughly a third of Canadian GDP; 80% of those exports are destined for the (slumping) US economy. Exports are mainly from the automotive, aircraft, telecommunications, oil, gas, and agricultural sectors.

Conservatives: In the past year under the Conservative government, Canada has successfully negotiated free trade agreements with Columbia and the European Free Trade Area. That's good. The Prime Minister has also managed to sour our economic relations with China. That's bad. The party has produced protectionist rhetoric that vows to defend the agricultural community but also a promise to re-assert leadership on free trade negotiations with the Americas, East and South Asia.

Liberals: The party platform includes only three paragraphs on trade, most of which lacks any concrete commitments. Unlike the Tories, the Libs at least give a nod to multilateral WTO negotiations; like the Tories, they also promise to make 'Canadian values' of human rights and corporate social responsibility central to trade negotiations.

Verdict: Both parties are strong on free trade in principle; both violate this principle in practice. The edge goes to the Conservatives.

Those Cheeky Elites

I will rarely venture to comment on the US election, mostly because I'm completely unqualified. But since there's a strong chance that I'll get to vote before my American friends and this topic applies to both sides of the border, here it goes.

The electoral politics of elitist-bashing has reared its ugly head once again, but this time with a twist: it's the Republican Party under attack. John McCain's personal wealth is such that he owns a number of houses, some for personal use, others for investment purposes. There are seven or eight or maybe ten homes, but the best part is that McCain can't remember. Given the current housing crisis in the US, the Obama campaign has understandably jumped on this gaffe and has been hammering on about just how out of touch and elitist McCain is from "regular" Americans. Obama, by contrast, only owns one house - he is therefore a man of the people. Nick Lembo finds this kind of politicking despicable; Paul Krugman thinks it's silly, but also necessary.

I don't want to talk about houses, but the elitist debate more generally. Ezra Klein points out that the election has now moved into a space where each side is trying to frame the other elitist:

Obama... is elite. As in "A group or class of persons enjoying superior intellectual, social, or economic status." Obama isn't an economic elite, but he is a social and intellectual elite. And it's that creeping sense that he's different, that he's better and knows it, that McCain is trying to exploit.

The Obama campaign, similarly, has realized that McCain is an elite, and that voters won't believe that a guy who has so many houses that he can't keep track of them will care if they lose the small condo they call home. This election, in other words, is becoming a contest to decide which type of elite voters hate -- [0]r fear, or mistrust -- more: A social elite or an economic elite?

Let me make this very clear: I want the elite running my country. I want the most elite of the elitist community. I want the one the elite look at and say: "Wow, I thought I was elite, but that person is... wow." I'm not talking about elite in the sense of being born into the right families, but rather in the meritocratic sense. If the candidate for the highest political office in the land was top of the class at one of the best universities, or was successful enough that he can afford multiple properties, or whatever - then that's a good thing. I want a leader who is both the smartest person in the room and wealthy enough so that concerns about financial security never cross his/her mind - not even once. If I see a campaign slogan that reads: "Vote X: I'm just as smart and qualified as you!" then I'm packing my things.

Backing me up on this point is one of America's premier political commentators: Jon Stewart. This is a little old, but his rant (about 7:20 in) is dead on. Enjoy.

Decisions, Decisions

In the off chance that you've been living with penguins in Antarctica for the past year or so and haven't heard the news: the US is having an election in a couple of months. Now it is looking increasingly likely that we Canadians will also get the chance to exercise our democratic privileges. Hooray! Now we can show the Russians and Chinese how it's done.

But who to vote for? It's a difficult decision - all sides have their merits and their faults. Do you know where you stand on all the issues? Do you vote for the candidate, the party or the platform? So many options, only one vote.

Well, you can stop your fretting. Science is reporting that the decision may have already been made for you: by your brain. It may not have told you it's decision yet, but chances are it has already made up its... er, mind on the major issues. If this study can be generalized, then it casts a shadow over all the campaign efforts made to win over the "undecideds."

Please don't read this as an endorsement for willful ignorance on all things politics - citizens still need to educate themselves on the actual policies of the candidates/parties before they can make a decision - but it's interesting all the same.