The Myth of Democratic Failure.

• Author: Prescott, Jeffrey

I

During the past fifteen years, a growing cadre of social scientists has used the tools of economic analysis to argue that when governments act, they do so inefficiently.(1) In The Myth of Democratic Failure, Donald Wittman suggests that these social scientists have it all wrong. He sets out to prove that government institutions, like traditional economic markets, are "organized to promote wealth maximizing outcomes."(2) If accepted, Wittman's thesis promises to reorient the efforts of economists, lawyers, and political scientists who currently approach political institutions with a presumption of inefficiency (p. 192). In the process, Wittman seeks to provide a new "research agenda" to guide future efforts at explaining democratic behavior (p. 3). Although Wittman produces an exceptionally clear and engaging new look at a contentious field, his ambitious broader goal--to "develop a consistent theoretical approach" to political markets (p. 2)--remains ultimately unfulfilled.

II

Wittman's work is less an affirmative account of governmental efficiency than a sweeping attack on the conventional view that political markets fail. Wittman seeks to debunk the "pessimistic views of democracy" that assume that "irrationality of voters, shirking by politicians, or rent seeking by special interests" condemns governments to produce inefficient results (p. 152).

In the first part of his analysis, Wittman challenges what he claims is at the core of the standard argument for democratic-market failure: The assumption that voters are ignorant. Under this assumption, voters are uninformed because the cost of obtaining enough information to cast a ballot is higher than the power of any one vote (p. 9).(3) Voters are also barraged with inaccurate and self-serving campaign material, creating "mistaken and biased judgments" (p. 38). Wittman counters this view by showing that it ignores voters' use of information-gathering shortcuts to choose the right candidate (pp. 12-15). He argues that political parties provide a "brand name" and reputation by which voters can assess the political positions of candidates (p. 21). Similarly, interest groups and the mass media provide access to "free" political data. Wittman also argues that voters are rarely influenced by biased or misleading information. Competition among candidates and the public's ability to discount the credibility of biased sources minimize the effect of such information on electoral outcomes (pp. 16, 22).

The conventional view of electoral politics also assumes a weak relation between the preferences of voters and the behavior of their elected officials. Self-serving legislators and influential interest groups prevent majority preferences from being identified and met (pp. 27-30). Wittman takes this view to task by arguing that competition within political markets forces politicians to maintain fidelity to voter preferences once elected. Challengers gain by publicizing evidence of an incumbent's shirking her public duty while in office (p. 22). Political parties, to maintain their value as "brand names," monitor their elected members to prevent a deterioration of the parties' reputations (p. 21). Wittman also uses competition to explain away the perception that pressure groups exert influence over electoral results, highlighting evidence that majority preferences generally trump interest group views (pp. 79, 84-85).

The second part of Wittman's argument challenges conventional accounts of democratic-market failure, which, according to Wittman, posit that government institutions, marked by high transaction costs and rampant rent seeking, inefficiently allocate political wealth.(4) In contesting this view, Wittman argues that government institutions are overwhelmingly designed to lower the costs of transactions between political actors and to allocate rents efficiently. Congress, for example, facilitates exchange through representation, which lowers the number of parties that must negotiate to make collective national decisions (p. 66).(5) He further contends that political parties efficiently...