Do the Poor Vote Their Self-Interest?

August 12, 2013

Many people worry that a majority of the voting-age population will soon pay no federal income tax and will therefore be motivated to vote themselves even more federal transfers. Undoubtedly, most of those paying little in taxes want more government transfers and a large percentage of them vote for such subsidies, says Dwight R. Lee, the William J. O'Neil Professor of Global Markets and Freedom at the Cox School of Business at Southern Methodist University.

But the desire for transfers does not explain why recipients go to the polls, or vote for them. The fact that an increasing number of Americans pay no federal income tax does raise serious concerns. But the best hope for dealing with these concerns comes from recognizing that the desire for transfers that others will pay for has almost no effect on people's voting behavior. This conclusion, which may surprise many people, follows directly from thinking about incentives and about opportunity costs.

  • Economists typically assume that people are as self-interested in one setting as in another.
  • In particular, they assume people are just as self-interested when making political decisions as they are when making market decisions.
  • This view is commonly challenged with examples of people voting in accordance with what they consider the public interest, even when it is against their self-interest.
  • Economists deny neither that such examples are common nor that there are important differences between market and political behavior.
  • But economists believe such behavioral differences are best explained by changes in incentives, not changes in people, from one setting to another.

People face very different incentives in markets than they do in the voting booth. In the marketplace the shopper's choice decisively determines what he receives and pays for. In the voting booth, the voter's choice is almost never decisive in determining what he receives and pays for. At best, voters receive and pay for what the majority of voters choose, whether they vote for it or not.

  • The costs and benefits of what we are thinking about buying in the marketplace are far more important to us personally than the costs and benefits of what we are thinking about voting for.
  • Assuming the probability of casting a decisive vote to be 1 in 500,000, we weight the importance of costs and benefits of a marketplace purchase 499,999 times more than we weight the same cost and benefits of a choice we are considering in the voting booth.

There is no doubt that far too many people have become dependent on government transfers, but that does not explain why they go to the polls, or how they vote. People's desire to vote for what they believe is in the public interest is what explains why they vote and how they vote. Paradoxically, and fortunately, that motivation is our best hope for reversing the growth in transfers.

Source: Dwight R. Lee, "Do the Poor Vote Their Self-Interest?" Library of Economics and Freedom, August 5, 2013.

 

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