Randomizing Districts for Reelection: A Thought Experiment

1. Randomizing Districts for Reelection: A Thought Experiment Scott Wentland Assistant Professor of Economics Longwood University Peter Stone Lecturer in Political Science Trinity College (Dublin, Ireland) Paper available at SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1767079 Or, e-mail me at: wentlandsa@longwood.edu

2. Puzzling Numbers • Approval Rating of Congress: • Gallup Poll: 13% (Sept. 2012) • CBS News/NYT: 12% (Sept. 2012)

3. Puzzling Numbers • Approval Rating of Congress: • Gallup Poll: 13% (Sept. 2012) • CBS News/NYT: 12% (Sept. 2012) • Re-election Rates: • Senate • 2006: 79% • 2008: 83% • 2010: 84% • House of Representatives: • 2006: 94% • 2008: 94% • 2010: 85%

4. Hate Congress, Love our Congressman? • Why do we hate the Congress, but love our own representative? • Perhaps the other districts are just not electing the right people… • What if we just elected better representatives? • A Nobel prize winning economist has some thoughts… http://www.youtube.com/watch?v=ac9j15eig_w&feature=share

5. Economists vs. Everyone Else • Why aren’t our Congressmen (or businessmen, or administrators) doing what we want them to do? • Everyone else: • Why can’t we elect the “right” people? • What we’ve got is bad/incompetent/ignorantpeople • Solution: try to get the “right” people in the job

6. Economists vs. Everybody Else • Why aren’t our Congressmen (or businessmen, or administrators) doing what we want them to do? • Economists • What are their incentives? • Given their incentives, should we expect normal, self-interested human beings to act any different? • Solution: Change the institution. Change their incentives.

7. Congressional Incentives • Members of Congress generally desire to be reelected • To be reelected, Congressmen are solely accountable to their respective districts • These districts are geographically defined, and Congressmen know who their constituencies are

8. Congressional Incentives • When a Congressman fights for his/her local interests, such interests may not advance, or may even be at odds with, the wider national interest • Some examples: • Wasteful pork-barrel spending • e.g. “Bridge to Nowhere” • Various subsidies and tariffs • District-specific provisions and earmarks in omnibus bills

9. Key Questions • Instead of going up for reelection in the same district over and over, what if legislators did not know who will be voting in their reelection campaign? • How might their incentives change? • How might we align representatives’ interests better with a more general, national interest?

10. A Thought Experiment • What if a Congressman had to campaign for reelection in a different district than the one that last elected him/her? • What if, for each Congressman and for each election, we randomize the districts that would vote on whether to reelect him/her? • How might this affect policy outcomes in a representative democracy?

11. An Illustration of the Rule • An example using the U.S. House of Representatives • Jane Doe, a Congressman from Ohio’s 9th District is elected in 2010 • In 2012, she and her challengers (decided by a primary) draws California’s 21st district from a random lottery • She and her challengers campaign in the new district and will appear on California’s 21st district’s ballot on Election Day.

12. Key Objectives • Explore the rule’s philosophical underpinnings • Why might this rule be desirable in principle? • Explore the rule’s economic implications and consequences • How does our rule compare with the current system of static geographically-based representation? • In what ways would our rule improve upon the current system?

13. Philosophical Underpinnings • John Rawls’ A Theory of Justice • How might individuals agree to just rules in a social contract? • A famous thought experiment: • The original position and veil of ignorance • In setting up the laws of social contract, if individuals were completely ignorant of who they are (e.g. place in society, social status, abilities, intelligence, etc.), they would be in a unique, objective position to agree upon just rules for society

14. Philosophical Underpinnings • Introducing a veil of randomness • The veil of ignorance is merely a hypothetical construct and does not exist in the real world • Our rule, however, does resemble it as it places legislators behind a different veil, a veil of randomness

15. Veil of Randomness • Representatives are blinded by a randomized procedure • Representatives do not know to whom they will be accountable in their next election • They will have no knowledge of the specific political, economic, or cultural make-up of their next constituency • Why craft rules/laws/policies specifically catered to benefit one geographically define area at the expense of others?

16. Economic and Policy Implications • We believe that, under certain circumstances, our rule will tend to generate: • Pareto-superior and equitable legislation • Unanimous agreement on such legislation • Stability (i.e. prevent “cycles”) • Incentives to reverse inefficient past legislation • A more moderate legislature, ideologically

17. Creating Legislation & Logrolling • Representatives may logroll, or trade votes, to secure concentrated benefits that their respective constituencies care about most • Example • A district in NC may have a strong interest in tobacco, while a LA district has a strong interest in sugar • The NC representative votes for a sugar tariff if • The LA representative votes for a tobacco tariff

18. Deals – Good Ones and Bad Ones • Legislative deals and compromises can be good or “positive sum” for our economy/nation as a whole • If deals get made, don’t we all want to be included in the benefits? • If good deals get made, don’t we want these policy outcomes to be stable? • What if legislators made bad or “negative sum” deals? • Isn’t this what the (12% approval rating) Congress is all about?

19. Logrolling – A Positive Sum Example • With the current system, Policy A & B pass if representatives from Districts 1 & 2 trade votes to vote for them as an omnibus

20. Logrolling – A Positive Sum Example • With the current system, Policy A & B pass if representatives from Districts 1 & 2 trade votes to vote for them as an omnibus

21. Logrolling – A Positive Sum Example • With the current system, Policy A & B pass if representatives from Districts 1 & 2 trade votes to vote for them as an omnibus

22. Logrolling – A Positive Sum Example • With the current system, Policy A & B pass if representatives from Districts 1 & 2 trade votes to vote for them as an omnibus …but District 3 loses out

23. Logrolling – A Positive Sum Example • With our rule, Policy A & B pass but for different reasons • One unlucky representative may face District 3 in the next election… • They have an incentive to redistribute gains by adding a Policy C to the omnibus bill

24. Logrolling – A Positive Sum Example • Remember, our representatives are behind a veil of randomness • They have little incentive to favor one district over another • Legislation will tend to be positive sum & Pareto-efficient • Generates unanimous agreement

25. Cycles • Under the current system, Policy A & B pass but this is not a stable equilibrium. • District 3 loses out and has an incentive to make a deal with either District 1 or District 2, leaving one of them out… • The districts who are left out always have an incentive to “reign in on the parade,” creating instability and cycles

26. Cycles • With our rule, voting cycles need not exist • All representatives stand behind the same veil of randomness and face the same incentives • They have little incentive to pass legislation that leave any districts out • Randomizing districts for reelection tends to generate stable policy outcomes

27. Logrolling – A Negative Sum Example • With the current system, Policies X and Y may pass, despite being a net cost to the nation as a whole

28. Logrolling – A Negative Sum Example • With the current system, Policies X and Y may pass, despite being a net cost to the nation as a whole

29. Logrolling – A Negative Sum Example • With the current system, Policies X and Y may pass, despite being a net cost to the nation as a whole

30. Logrolling – A Negative Sum Example • With the current system, Policies X and Y may pass, despite being a net cost to the nation as a whole

31. Logrolling – A Negative Sum Example • With the current system, Policies X and Y may pass, despite being a net cost to the nation as a whole • District 1 & 2: +4 (or +2 apiece) • District 3: - 6

32. Explaining the 12% Approval • Among other reasons, we tend to dislike Congress because they often make bad deals and produce suboptimal policy • The deals don’t just extend to economic policy • We can think of the “+4” and “-6” as utility, not dollars • “Negative sum” policy can be ideological, too • Legislators tend to get re-elected because they fight for their respective districts • District 1 & 2: re-elected for “bringing home the bacon” • District 3: re-elected for demonizing Reps. 1 & 2

33. Logrolling – A Negative Sum Example • With our rule, Policies X & Y will not pass • There is some probability (.33) a representative will draw District 3 • Because this is a negative sum game, there is no way to redistribute gains such that all districts are better off

34. Back to Friedman • “The way you solve things is making it politically profitable for the wrong people to do the right things.” - Milton Friedman

35. Further Implications • Legislators will have an incentive look for inefficiencies in past legislation (looking for negative sum legislation) • Undoing negative sum legislation is, by definition, a positive sum game • Forward-looking, self-interested legislators will seek out such inefficiencies and redistribute “free lunch” gains across all districts

36. Ideology & The Median Voter • Under the current system, we tend to have a wide spectrum of representatives ideologically • An extreme representative may simply represent a more extreme district (i.e. the median voter in that district is more extreme)

37. Ideology & The Median Voter • With our rule, extreme candidates have the lowest probability for reelection • Because districts for reelection are randomized, more moderate candidates have the highest probability of winning

38. Conclusions • Problems with our current system of representative democracy are well-known • Our rule certainly does not solve all of them • We think our thought experiment does highlight some key ways randomness can change incentives • Legislators that are behind a veil of randomness tend to create: • Pareto-superior and equitable legislation • Unanimous agreement on such legislation • Stability (i.e. prevent “cycles”) • Incentives to reverse inefficient past legislation • A more moderate legislature, ideologically

39. “The way you solve things is making it politically profitable for the wrong people to do the right things.” - Milton Friedman