How to vote profitably

At a time when several state assembly elections are being fought, general elections are around the corner and economic policy is becoming a key issue in elections, it is instructive to go back to political theory.

Remember Anthony Downs’ An Economic Theory of Democracy? Downs assumes that political parties and voters act rationally in pursuit of clearly specified goals. The main thesis of Downs is that “parties in democratic politics are analogous to entrepreneurs in a profit-seeking economy.” Following from the above argument, it is believed that political parties formulate policies to gain the most votes. However, if voters also behave rationally, then vote-maximising parties will have to be relatively honest about keeping promises when elected, and their policies will be relatively consistent over time.

Voters’ rationality, however, gets muddled in multi-party systems such as ours. Parties in coalitions, however, are pressured by conflicting requirements of making policies that are broad-based to attract most number of voters. And naturally, during elections most parties in coalition politics are ambiguous about the compromises possible.

That may undermine the rationality of an individual voter, but according to Downs, the good news is that if there is sufficient consensus among voters, democracy can function efficiently. Key question then is: are we, as a nation, sufficiently cohesive on the broader national goals—economic and others?

The down syndrome
In Downs model each citizen votes for the party he believes will provide him a higher utility income than any other party during the coming election period. To discover which party this is, he compares the utility incomes he would receive if each party is in office. In a two-party system, this would be:

Citizen’s expected party differential (EPD) = E U(A, t+1 ) – E U(B, t+1)
E = Expected value
U = Utility income
A= Incumbent party i.e. governing party in time period
B = Opposition party
If EPD is positive, then a person votes for incumbents
If EPD is negative, then he votes for opposition
If EPD is zero, he abstains

—Shalini S. Dagar