The Economics of Voting

Our weekly explainer on economics using lessons from popular culture. In Installment 14, Newton Kumar discovers Rational Ignorance.

If you haven’t already, I suggest you hop over to your nearest theatre and watch Newton, India’s entry to the Oscars. Directed by Amit V Masurkar, it’s a lovely story of an idealistic government servant who is shocked by the flimsiness of India’s democracy when he is deputed to conduct elections in a remote part of India. It also contains an important lesson from Public Choice Theory — one that most Indians already intuitively know. It demonstrates how widespread Rational Ignorance is.

Newton Kumar, the protagonist played by Rajkumar Rao, sets up a voting booth in the jungles of Chhattisgarh. None of the voters on the voting rolls turn up. Finally, because a foreign journalist is visiting, they are herded by the army to vote for the sake of appearances. Newton gathers them outside the voting booth to explain the procedure of voting. He is shocked to discover that they have not heard of any of the candidates, and don’t care who wins because it won’t make a difference to their lives. Had he read an economist named Anthony Downs, Newton would not have been surprised.

In his 1957 book, An Economic Theory of Democracy, Downs coined the term ‘Rational Ignorance’. This is a key insight of Public Choice Theory, which uses economic tools to analyse political behaviour. The voters Newton encountered may have been ignorant, but that ignorance was rational. A simple cost-benefit analysis will tell you why that is the case.

Every voter knows that his single vote won’t turn an election, so the cost of not voting, or voting for someone bad, is negligible. However, he would have to put in a substantial investment in terms of time and effort to make an informed choice. He’d have to understand economics, and the complex consequences of decisions the government was likely to take. He’d have to understand the political economy, the incentives of all the different political actors, and the likely consequences. He’d have to develop enough understanding of history and human nature to know which politicians were making the right promises and how likely they were to deliver. That’s a lot of effort for no likely reward — so why bother? (This is especially so when your life is nasty and brutish, like that of the Gond tribals in the film.)

What makes this ignorance even more rational is that there is usually not much difference between the candidates on offer. The Indian state is a bloated, parasitic beast, more into rent-seeking than delivering services. Political parties compete to be the one to run this legal mafia for a while. As HL Mencken once said, “Every election is a sort of advance auction sale of stolen goods.”

As I wrote in a recent column, the whole game of politics is about using money to come to power, and then using that power to generate more money. Why don’t the people protest such theft? Well, one reason is the costs are dispersed over a large number of people, and the benefits go to a few. If a prime minister takes one rupee from every Indian and gives it to his favourite industrialist, most Indians won’t bother to protest (what’s one rupee?), or even know about it (rational ignorance). But the industrialist will gladly fund that politician in the next elections. (This is a simple example, but it really is how politics works. In Public Choice, this phenomenon is known as ‘concentrated benefits and diffused costs.’)

The apathy of the Gond tribals is, thus, understandable. But is it justifiable? Is it their duty to vote, as Newton suggests in the film?

I have heard it said that those who do not vote don’t have a stake in our democracy and have no right to crib about politicians. I disagree, for two reasons: One, voting is a right, and not a duty. Two, using economics again, consider the political marketplace to be like any other. Let’s say you want to buy a shirt, and go to a mall to do so. You visit every clothing store there, but every shirt you see is substandard and disgusting. What should you do?

I’d consider it a goofy line of thought that it is your duty to buy a shirt anyway, and if you don’t, then kindly don’t express an opinion on shirts. On the contrary, by not settling for a substandard shirt, you increase the incentive for someone to start making the kind of shirts you want to wear. By not voting you send a message to other potential political entrepreneurs that there is a gap in the market. A non-vote has value as information. I would argue, therefore, that you should refrain from voting if you feel none of the candidates are up to the mark. The signalling is important.

That holds, of course, only if you care about politics to begin with. It’s rational not to.


Further readingPublic Choice: A Primer by Eamonn Butler is an exceptional introduction to the subject. Here’s a free pdf.