Misconceptions of Political Party Incentives

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The average citizen in the Western world is fully aware that politicians have trouble with keeping their promises. They are under no misconception that politicians are entirely devoted to the will of the people. They understand that lobbying from large organizations has a much larger influence on a politician than an individual vote.

What is less commonly understood is the incentive structure that influences major political parties to work towards change, but not to actually accomplish it.

Using the United States as an example, both major parties have a set of voters that will reliably vote for them. What they’re fighting for are the votes of centrists and independents that don’t align ideologically with either party. These voters value some issues more than others, and will tend to vote for the party that advocates solving the issues most important to them.

This presents each major political party with a dilemma. If they promise to solve a problem people care about, they will get votes. If they solve that problem, that issue is no longer important to voters. Independent voters will then cast their vote based on their second most important issue (now moved to first), which may align more with the opposing party.

The issue of poverty is the clearest example of this incentive system. When a major political party promises to eliminate (or reduce) poverty, poor citizens will support that party. If the party is elected, it has three options. It can completely ignore its promise, solve the problem, or pretend to fix the problem.

If it breaks the promise, it risks losing poor voters that feel betrayed. If it solves the problem, it risks losing poor voters (who are no longer poor), who will now vote based on other issues that may be better represented by another party. If it pretends to solve the problem by establishing programs to “fight poverty” that (whether intentionally or not) fail to actually reduce it, the party can continue to receive votes from the poor that are now relying on these programs.

Parties are also disincentivized from solving problems for an uninformed voter base. Once unsustainable programs are established as a “solution” to a problem, it can be political suicide to even consider fixing an actual problem that the general population would rather ignore. If one political party establishes a counterproductive regulation or program in the name of “fixing” a problem, anyone that points out the fault will be accused of being in opposition to the problem it was supposed to fix.

Political parties are also prone to advocating for causes they know they are unlikely to win. The Republican Party’s fight against the Affordable Care Act (Obamacare) is a popular example. Prior to the 2016 election, Republicans strongly advocated for a repeal of Obamacare, using it to raise money and rally support for Republican candidates. After the 2016 election (when Republicans controlled the House, Senate, and Presidency), they offered unpopular legislation that some Republicans strongly opposed on principle. The attempt at repealing Obamacare when Republicans were in control was weak at best.

Within two-party systems, a political party need only be less bad than its opponent. Citizens that abandon voting for either of the parties are of no concern to the duopoly. The winning party of an election only needs more votes than its opponent.

Lobbying from special interest groups and powerful individuals certainly plays a role in the actions of many politicians, but even without this factor, political parties are still incentivized against solving the problems that matter most to voters.

This article represents the views of the author exclusively, and not that of Being Libertarian LLC.

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Nathan A. Kreider is author of the Misconceptions column for Being Libertarian, and has written for the Austrian Economics Center, the Foundation for Economic Education, and the Liberalists. He also occasionally publishes a blog and video content, including short book reviews, which can be found on his website, nkreider.com. He can be contacted by email via [email protected]