Politics through the Lens of Economics

Lecture 5: Who Becomes a Politician?

Masayuki Kudamatsu

1 November, 2017

Any change

in policy of your choice?

List of policies chosen

Don't think on your own

For your term paper...

Discussion Time

Background for discussion #1

131 mass shootings in the U.S. since 1966

Image source: Washington Post (2017)

Worksplace

Church

School

Military

Shop

Other

Background for discussion #1 (cont.)

131 mass shootings in the U.S. since 1966

Image source: Washington Post (2017)

Background for discussion #2

Image source: Pew Research Center (2013)

Discussion Time

Does the Citizen Candidate Model explain

why gun control hasn't been adopted

in the U.S.?

Who becomes a politician?

Two dimensions to consider

Representation

Competence

Media sometimes report politicians' previous occupation

The Economist (2009). Image source: gulzar05.blogspot.jp/2009/04/occupational-origins-of-politicians.html

Image source: www2.ttcn.ne.jp/honkawa/5217.html

Naitonal legislators' previous job

across major rich countries

But these statistics are not meaningful

unless it's compared to the entire population

Evidence from Sweden

Data: about 50,000 municipal councillors during 1982-2010

Botkyrka municipal council meeting

Image source: www.aina.org/news/20140131142534.htm

Share

1%

Income percentile

0

100

Evidence on representation from Sweden

Obtain income distribution for every adult Swede in 1979

Swedish Politicians DO represent the entire population

in terms of father's income

Figure 4 of Dal Bo et al. (2016) "Who Becomes a Politician?"

While Swedish doctors or CEOs DO NOT

Figure 5 of Dal Bo et al. (2016) "Who Becomes a Politician?"

Figure 7 of Dal Bo et al. (Feb. 2016) "Who Becomes a Politician?"

Swedish politicians DO represent the entire population

in terms of father's occupation 

(farmers overrepresented, though)

Measure competence by:

Cognitive skills (i.e. IQ test score)

Leadership

"Residual ability"

Evidence on competence from Sweden

Swedish politicians are

more competent

than the population

with similar parental income

Figure 12 of Dal Bo et al. (Feb. 2016) "Who Becomes a Politician?"

Swedish politicians are

more competent

than the population

with similar parental jobs

Figure 13 of Dal Bo et al. (Feb. 2016) "Who Becomes a Politician?"

We do not know whether the same is true for other countries

due to the lack of data

When competent citizens become politicians?

Consider a citizen-candidate model:

Step 1: Each citizen decides whether to run for office

Running for office is costly

Step 2: Each citizen decides whom to vote

Candidate wins by plurarity

Step 3: Winning candidate picks a policy to implement

When competent citizens become politicians?

Modify a citizen-candidate model so that

Citizens differ in competence, not in their ideal policy

When competent citizens become politicians?

Step 3: Winning candidate picks a policy to implement

Step 2: Each citizen decides whom to vote

Optimization at each step

Optimization at Step 1: whether to run for office

When competent citizens become politicians?

Competent

Incompetent

Cost of running for office

Optimization at Step 1: whether to run for office

When competent citizens become politicians?

Competent

Incompetent

Net benefit from running for office

Loss

Gain

Optimization at Step 1: whether to run for office

When competent citizens become politicians?

Competent

Incompetent

Loss

Gain

Run for office

Keep working

in private sector

Optimization at Step 1: whether to run for office

When competent citizens become politicians?

Only incompetent citizens run for office

If being a politician is more rewarding...

Competent

Incompetent

When competent citizens become politicians?

If being a politician is more rewarding...

Competent citizens are elected politicians

Being a politician is more rewarding when...

When competent citizens become politicians?

Being a politician is more rewarding when...

Politicians are prestigious

When competent citizens become politicians?

So we have multiple equilibria

When competent citizens become politicians?

Evidence from Italian mayors

Mayor's salary jumps

from 2,169 euro to 2,789 euro (per month)

across the municipal population of 5,000 in Italy

Evidence from Italian mayors

A pay rise induces

more educated citizens to run 

Candidates

Figures 1 and 2 of Gagliarducci and Nannicini (2013)

Who becomes a politician in autocracy

Who becomes a politician in autocracy

Fact #1: Politicians are less educated than in democracy

Figures 3 and 4 of Besley and Reynal-Querol (2011)

Who becomes a politician in autocracy

Both good performance and social connections

are key to become a top politician in China

Fact #2:

Who becomes a politician in autocracy

Cabinet ministers in Africa 

represent the population distribution of ethnicity

Fact #3:

Who becomes a politician in autocracy

Cabinet ministers in Africa 

represent the population distribution of ethnicity

Figure 1 of Francois et al. (2015)

Fact #3:

Sierra Leone

Political parties as a commitment device

Consider two politicians with different ideal policies

policy

politician A

politician B

Political parties as a commitment device

If these two politicians form a political party

the party can commit to any policy in between

policy

politician A

politician B

Political parties as a commitment device

To understand why, consider a policy not in between 

policy

politician A

politician B

Political parties as a commitment device

To understand why, consider a policy not in between 

policy

politician A

politician B

Both politicians are better off by moving this policy to the left

Political parties as a commitment device

policy

politician A

politician B

Same is true for any policy not in between

The party AB cannot commit to any policy not in between

Political parties as a commitment device

policy

politician A

politician B

Now consider a policy in between

Political parties as a commitment device

policy

politician A

politician B

Now consider a policy in between

Moving this policy towards B's ideal policy

Political parties as a commitment device

policy

politician A

politician B

Now consider a policy in between

Suppose 

Suppose 

neither A nor B can win an election himself/herself

but this policy allows the party AB to win an election

Political parties as a commitment device

policy

politician A

politician B

Now consider a policy in between

Then

Both A and B are willing to promise this policy

Political parties as a commitment device

policy

politician A

politician B

Same is true for any policy in between

The party AB can commit to any of these policies

Political parties as a commitment device

A role of political parties in policy-making

Consider two policy issues (e.g. redistribution & whom to subsidise)

Redistribution

Group-specific

subsidy

Consider three groups of citizens where no group has a majority

Redistribution

Group-specific

subsidy

Rich

Poor

Special

Interest

A role of political parties in policy-making

Redistribution

Group-specific

subsidy

Rich

Poor

Special

Interest

Without political party

Poor will run for office and win in equilibrium

A role of political parties in policy-making

(by the same logic as here)

Redistribution

Group-specific

subsidy

Rich

Poor

Special

Interest

What if Rich and Special Interest form a political party?

A role of political parties in policy-making

Rich

Special

Interest

The party cannot commit to any policy not on the line in between

A role of political parties in policy-making

Redistribution

Group-specific

subsidy

Rich

Poor

Special

Interest

Both Rich and Special Interest prefer these policies to Poor's ideal

A role of political parties in policy-making

Redistribution

Group-specific

subsidy

Rich

Poor

Special

Interest

The party obtains the majority of votes by offering these policies

A role of political parties in policy-making

This theory of political party may explain the rise of BJP in India

India: world's biggest democracy ever since its independence in 1947

Image sources:

www.brobdingnagian.com/2014/indian-general-election/ 

blogs.wsj.com/indiarealtime/2013/04/15/by-the-numbers-can-the-bjp-go-it-alone/

Summary

Swedish politicians are

Representative of the whole population in terms of social class

More competent than the average Swede

Competence citizens become politicians

if being a politician compensates for their income loss

One role of political parties: 

Allow politicians to commit to policies other than their ideal

These insights wouldn't have been obtained

if we hadn't had the citizen-candidate model