Saturday, October 3, 2009

Majorities and inequality

Back to the electoral reform and the left debate....
Ever since the Persson/Tabellini and Iversen/Soskice contributions, the link between PR and redistribution and public sector size has been established as a strong one. The data is quite strong, with a consistent effect being empirically observed. The theory is not bad either - Iversen and Soskice provide a quite plausible theoretical account about voter and party behaviour which fits the data quite well. But still I'm not comfortable with this argument, probably because instead of looking at the formal models and econometric results, I stubbornly try to run the theory past individual country cases I know quite well. The PR=redistribution result works fine until you look at the history of government spending, redistribution and electoral politics in any real case.

My first problem with it is that it implies the following counterfactual: the United States would probably have generous public spending and a large welfare state if it had adopted PR (or, alternatively, Sweden would have a small state and low taxes if it had adopted majoritarian rules). Do we really buy this? Is the effect of the electoral rules so strong as to reverse (probabilistically of course) the positions of these two polar cases on the redistribution spectrum? It seems a little implausible - surely things are going on that are strong enough to counteract the effect of electoral rules. And probably, these things are also likely causes of electoral rules, a familiar objection to their arguments.

My second issue with it is that we do have cases of electoral regime change, and it doesn't seem obvious that these changes change the nature of the politics of redistribution, eg in 1960s France or 1990s Italy. Of which more in later posts. Presumably if the effect of electoral rules is so strong, then changing them is bound to change something, unless the effect is circumscribed to key historical periods in which the long-term patterns of redistribution are up for grabs.

My third issue is with the theory. Iversen and Soskice show how under majoritarianism, there is a credible commitments problem undermining the centre-left coalition which will need to form pre-electorally to promote redistribution. This is all well and good if the effect of majoritarianism takes place at the party system level. But, of course, we know it doesn't. Duverger's law is only logically valid at the constituency level, as Gary Cox and Chibber and Kollman have shown. And majoritarian polities have large numbers of constituencies, with diverse class structures. Where does that leave the coalition formation logic? I'm not sure, but it has to change something.

A clue as to what might be missing from this debate comes from Rogowski's interesting papers on the effect of majoritarianism on market liberalization (the basic logic being that majoritarian parties need to produce public goods to win majority support, and therefore sectional interests have less ability to hijack policy-making). But patterns of market liberalization appear very path-dependent, and tied also to legal and religious traditions. So what causes liberal markets - electoral rules, or common law legal systems and the Protestant religion? Should be possible to test this, since electoral rules come after the latter two. 

So the upshot of all this is, although I've been arguing recently that Labour should go for PR as a well of saving its skin and promoting redistribution, all the above considerations make me doubt my own reasoning. More soon.