Predicting the Political Landscape after Electoral Reform in BC

Politicians have a notoriously bad record predicting the consequences of policies they have adopted. Recent tax increases on the highest income earners in Canada were predicted to raise revenues by $3 billion but in the first year (2016) the amount of taxes these Canadians in the top one percent paid were $4.6 billion lower than they paid in the preceding year. 

Politicians love forecasts of doom, which increases their power and status as they adopt policies to prevent it. Politicians created recycling programs after the Club of Rome in 1972 predicted that the world was running out of natural resources. The depletion of oil reserves was the conventional wisdom around the turn of the century.

As a wit once said, predictions are very difficult, especially about the future. Predictions like those by the Liberal government, the Club of Rome and energy analysts often turn out wrong because of improbable events that could not be foreseen – the black swans discussed by Nassim Taleb. But predictions also are often wrong because predictable events are not properly considered. History has shown convincingly that high-income earners always shift income through time, space and into low-taxed investments to reduce their tax obligations. Consumers always reduce purchases when the price of a good increases and producers react by increasing supply so that the world will never run out of resources.

The predictions by politicians and pundits about the political landscape in British Columbia resulting from the adoption of a proportional representation system for elections is likely also to be false. The leaders of the NDP and Greens initiated a referendum on this change in the expectation that they would continue to receive at least the same proportion of votes as they did under the old system and thus together would be able to form government easily without precarious majorities as they have since 2017. The Greens believe moreover that they will receive more votes than they did under the old system as voters will realize that they no longer “waste” their votes on a party that has no chance to be in government.

The defenders of the current electoral system predict that the new one will bring into parliament politicians representing existing parties that have never had electoral success before, such as Libertarians, Communists, Christian Heritage, Cascadia, Social Credit and, until the 2017 election the Greens, all of which were on that year’s ballot. They also predict the formation of entirely new parties with policy agendas that are “extreme right-wing”, “racist-fascist”, “anti-immigrant”, “single issue”, “communist “, “libertarian unlimited immigration” etc.

It is quite unlikely that any of the small existing parties or the expected new parties will get more than five percent of the vote, which will be a threshold required by the proposed new voting system leading to seats in parliament. The votes they receive will come from the supporters of the existing major parties but affect them unpredictably and in the aggregate could lead to major changes in their election platforms.

However, in the above list of parties are absent some, which have large constituencies with strong bonds among voters and a good chance to win seats in future elections. These parties are likely to be rooted in the large ethnic populations living in Richmond, Surrey and other suburbs of Vancouver. Opportunistic political entrepreneurs could gain votes with the promise to get spending programs and regulations benefiting their regions in return for joining a ruling government coalition.

 

There are also likely to be opportunities for new, populist parties that attract voters who want to see changes in some policies made unchallengeable by the code of political correctness. According to opinion surveys, this is the case for reform of Canada’s immigration and refugee policies. Maxime Bernier has successfully formed a federal party with such a policy as an important part of its agenda.

Bernier’s proposed reforms of immigration policies are widely condemned as racist and fascist by the political elites in Canada. In fact, they are neither but are designed to serve the national interest, just like the federal Liberals policies on supply management, culture and banking. A BC branch of Bernier’s Peoples’ Party under proportional representation might attract enough votes from all three major parties to enter parliament with uncertain effects on the establishment parties

.

Most of the parties with a chance to gain seats in parliament are unlikely to fit the traditional classification of left or right but they are likely to win enough votes from the NDP, Liberals and Greens to create major changes to the political landscape in British Columbia and with them bring unpredictable new social and economic conditions.

Voters in the BC referendum who do not want to see such changes should vote for the retention of the system that has made the province one of the most prosperous in Canada.

Herbert Grubel

Emeritus Professor of Economics

Simon Fraser University

Published in Vancouver Sun Predicting the political landscape after electoral reform in B.C.

Vancouver Sun editorial, November 4, 2018

https://vancouversun.com/opinion/op-ed/herb-grubel-predicting-the-political-landscape-after-electoral-reform-in-b-c

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 et.al.: 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

https://vancouversun.com/opinion/op-ed/opinion-the-effects-of-pr-on-politics-and-economics

Thriving Nationalist/Anti-Immigrant Parties in Europe Why not in Canada?

The German federal elections on September 24, 2017 produced an electoral earthquake. The country’s ruling coalition headed for 12 years by Germany’s Chancellor Angela Merkel lost its majority, mainly because of the success of the nationalist/anti-immigrant party Alternative for Germany (AfD), which won 97 seats, up from zero in the preceding elections. On November 16^th, Merkel made unprecedented announcement that she had been unable to form a new governing coalition and refused to head a minority government, preferring a new election instead.

Nationalist/anti-government parties in other important countries of Europe also have gained much support from voters. The percentage of the total vote and the number of seats gained in these countries after the most recent elections were:

Switzerland 29.4 and 65/200; Denmark 21.1 and 37/179; Austria 26 and 51/183; Finland 17.7 and 38/200; Norway 15.2 and 27/169; Netherlands 13.1 and 20/150; Sweden 12.9 and 49/349; Germany 12.6 and 97/631.

In France the National Front in 2017 received 13.2 percent of the votes, more than the percent gained by the AfD, but because of the country’s electoral system gained only 8 out of 377 seats in parliament. In Poland the Law and Justice party received 37.6 percent and with a majority of 235 out of 460 seats has formed the government. Nationalist/anti-immigrant parties have also been successfully attracting votes in the Czech Republic, Hungary, Bulgaria, Latvia and other former communist countries of Eastern Europe.

Voters dissatisfied with their countries’ immigration policies also played important roles in the victory of the British referendum that led to Brexit and of President Donald Trump in the United States.

The platforms of the nationalist/anti-immigrant parties in Europe appealed to voters who had personal experiences and learned from media reports that immigrants were responsible for many growing social and economic ills in their lives: the number and scope of terror attacks and criminal acts; threats to cultural and religious institutions and practices; the cost of housing; the crowding of schools, hospitals and public spaces and the scarcity of jobs taken by immigrants.

The establishment politicians in the countries with strong nationalist/anti-immigrant parties obviously have not been able to counter these views by claiming that their supporters are  racist, xenophobic and fascists and that they do not understand the large benefits brought by immigrants: the elimination of labor shortages; reductions in the financial problems of social programs; increases in global solidarity with needy people in the rest of the world and the benefits of greater cultural and religious diversity.

Canadian politicians and intellectual elites have been ignoring the growth of nationalist/anti-immigrant parties in Europe. The current government has instead increased the planned annual number of immigrants from the recent 250 thousand to a high of 360 thousand by the year 2020.

It seems that this policy is out of touch with the views of the public. An Angus Reid poll in the middle of 2017 found that 57 percent of Canadians agreed with the statement that “Canada should accept fewer immigrants and refugees.” The latest annual poll by the federal Department of Immigration reported in November 2017 that increasing numbers of Canadians hold negative views about the current level of immigration.

Why the persistence of the difference between government and public views on immigration policies? The answer is that Canada uses the first-by-the-post system to allocate seats in parliament. In Europe most countries use proportional representation to assign seats, which enabled the creation and success of the nationalist/anti-immigrant parties.

Canada’s establishment parties will not abandon the present electoral system. Their assured protection from anti-immigrant parties brings them too many opportunities to use immigration policies to buy the votes of employers of cheap immigrant labor, the firms and professionals wanting larger domestic markets for their output, the real estate and construction industries, the communities of recent immigrants and the immigration industry of lawyers and consultants – even as they know that the public disapproves of the mass immigration they create.

The majority of Canadians who want to see fewer immigrants will have to wait a long time before they get their way.

This essay has been published in the Vancouver Sun on December 8, 2017:

https://www.pressreader.com/canada/vancouver-sun/20171208/281681140215066