Thursday, November 15, 2018

The Ultimate Effects of PR on the Political Scene and Economics

BC Voters will soon be flooded by a growing amount of information about the superiority of proportional representation (PR) over the majority system (MS) presently used for allocating seats in parliament. If the past is a guide to the future, this information will be almost totally about how PR produces a “fair” distribution of seats, avoids having a government whose members in parliament received less than one half of the votes and thus leads to “wasted” votes.

The expected flood of information is likely to provide little detailed explanation the three different types of PR systems under consideration, mainly because the explanation is extremely difficult as each system involves complex, wide-ranging and fundamental changes in the size of electoral districts, the number of candidates in each and the procedures for allocating votes.

The forthcoming information can also be expected to be short on the discussion of important changes that PR will bring to the political institutions and environment.

First, the political environment will be changed fundamentally by the highly likely increase in the number of parties contesting elections. This prediction is based on a review of academic studies by Lydia Miljan and Taylor Jackson, which showed that the number of political parties is 2.5 in MS countries and 4.6 in PR countries.

Most of the additional parties that BC can expect under PR are likely to represent small groups representing narrow regional, industrial, religious or labour interests and, most disturbingly, members of distinct ethnic populations. The increased number and objectives of the increased number of parties will raise the divisiveness of election campaigns, parliamentary debates and the adoption of laws.

Second, the time it takes to form government after elections is 32 days in MS and 50 days in PR countries. Such an increase reflects the more turbulent political environment brought about by the enlarged number of parties and will reduce the efficiency of the electoral system.

Third, coalition governments formed under the PR system have shorter life-spans than those under the MS system, mainly because political differences among parties in the coalition after some time turn out often to be irreconcilable. The costs of the extra elections fall on taxpayers and the shortness of the life-span of governments impedes their ability to adopt complex legislative programs.

The forthcoming information campaign will also be short on the effects PR has on economic performance. Thus, the PR system gives small single-issue parties leverage over the passage of legislation that is greater than is justified (or fair) in the light of the share of the votes they received. This leverage arises because large parties need the votes of these small parties to form government, which they get only on the condition that they adopt some of the smaller parties’ legislative priorities.

This problem exists presently in BC, where the large NDP party has formed a coalition with the small Green party to form government. The legislative agenda of this government includes a resolute opposition to the construction of a pipeline, which was the priority of the Green party and played a much less important role in the NDP election platform.

The political agendas of small parties in PR countries often are designed to advance the ideology of the extreme political left, which they have not been able to achieve under the MS system and which explains why demands for the adoption of PR comes from them: more income redistribution, spending on social programs, culture, the environment and subsidies to select economic activities. All these policies result in higher government spending.

The extent to which government spending in PR exceeds spending in MS countries has been studied in a number of academic studies, which were summarized by Clemens spending as a percent of national income in recent years has been 2.3 percent for MS countries and 2.9 percent for PR countries. Important is the fact that this higher spending leads to correspondingly higher taxes to pay for it and often is financed through deficits, which raise taxes on future generations.

Why should the expected increase of government spending under PR be the focus of the public discussion? As revealed by many academic studies, increased spending beyond a certain optimum level leads to lower economic growth, lower per capita incomes and reduced freedom.

The present levels of spending and taxation in BC have been determined in past MS elections. Voters in the forthcoming referendum should consider that under PR their taxes will go up to finance increased spending that may or may not benefit them.

Let us hope that this fundamental issue will receive the attention it deserves, especially since supporters of PR are highly unlikely to bring it up.

Herbert Grubel
Emeritus Professor of Economics
Simon Fraser University

Published in the Vancouver Sun editorial, October 20, 2018

No comments:

Post a Comment