Lecture: Parties, Voters and Interest Groups: The Downs Lecture   An Economic Theory of Democracy

1.   Introduction: Anthony Downs is a famous political scientist no one has ever heard of. He has constructed a simplified way of understanding the behavior of citizens/voters, political parties, and interest groups in democracies. This approach is based on the way economists (shudder) might think about politics. It is a rational approach to voting, party and interest groups behavior.

2.  He starts with these assumptions: We live in a society with a government, and we have a democracy.

    A.  Government is the social organization with the power to coerce all other social elements (people and organizations).

    B.  A democracy is a essentially a process for electing leaders. It has these characteristics:

         1. universal suffrage (everyone has a vote, but only one)

         2. at least two parties competing in elections

         3. winning parties do not ban losers

         4. losing parties accept the loss

3.  He assumes that two conditions apply generally:

     A.imperfect information: it is impossible to know everything one would wish to know when making a decision.            Information is finite, incomplete, and costly.

     B.  rationality. Everyone tries to maximize benefits and minimize costs

4.  So, if we first consider the question of how rational citizens should behave,. we find that they should behave rationally, given imperfect information. For them the decision of whether to vote in an election can be thought of this way:

1. BENEFITS - COSTS < 0 (Says Downs, for most people)
2. Promises from: information
3. |Bush - Kerry| voting
4. Given this situation of Costs and Benefits, Downs argues that nearly all citizens should adopt a strategy of "Rational Ignorance." This means knowing nothing, or at least as little as possible, about politics, let alone voting.

5.  What about political parties? They try to act rationally, too. Parties wish to win elections. This takes a large, but unknowable number of votes. Moreover, parties realize that rational ignorance is the strategy that most potential voters should adopt. How can they get people to vote for them under these circumstances? Go back to benefits and costs. Parties could either increase benefits or decrease costs. But any promise to increase benefits can be matched by the other party, so increasing benefits won't work, especially because a benefits race may increase the amount of information people must seek to make intelligent decisions, and this lowers their incentive to vote. So parties try to cut costs. They can and do directly cut voting costs, by offering help to voters who need to register and vote. But, more important, they shift from issues to images to cut information costs. Just like Pepsi and Coke they sell images rather than contents or substance. If voters can judge party differences on the basis of clear an stable images, it cuts costs dramatically (although it may increase error a lot).

6.  How about interest groups? Parties need money to promote images. Interest groups supply it. For them the cost/benefit calculation is positive. They can even give large sums if they can reasonably expect to get more back from the parties once they are in power (and they can). So they provide the money gladly, and to both sides, since they can't be sure who will win.

7.  What does this mean? It means that interest groups get what they want from the process. At least one party gets what it wants at the election. Voters are duped in large numbers, since their votes are not clearly cast for any particular issue or set of issues.