Reflections on John McGinnis’ Accelerating Democracy

Guest blogger John McGinnis’ new book Accelerating Democracy is an outstanding analysis of the ways in which modern technology and social science can improve the quality of decision-making in government and society. It is probably the most important book on that subject in a long time.

Much of John’s thesis is compelling. He is right that modern social science enables us to evaluate the effects of public policy far more accurately than in the past, and that modern technology makes it easier to disseminate the resulting knowledge. I also agree with John’s argument that the technological and social scientific revolutions strengthen the case for political decentralization, enabling lower-level governments to experiment with new types of policies. We can now evaluate such experiments much better than in the past, which increases their value to society. John is especially persuasive in arguing that we should legalize prediction markets, which are an extremely valuable source of information, even if imperfect.

I do, however, have two reservations about John’s conclusions: Because of the problem of rational political ignorance, voters may fail to exploit much of the new information available to them. We will be able to make better use of new data if we make more of our decisions by “voting with our feet” than by voting at the ballot box. And in many cases, such foot voting is best facilitated by limiting state and local government power, as well as that of Washington.

I. How Political Ignorance Reduces the Benefits of New Information.

As John effectively demonstrates, recent technological advances both give us new policy-relevant information and make it easier for the public to access it. The problem is that voters have little incentive to actually learn and make use of the new data. Because any one vote has only an infinitesmal chance of influencing the outcome of an election, most voters have little incentive to learn political information. They are “rationally ignorant”. As a result, the majority of the public is often ignorant of very basic political information that has long been readily available through the media and the internet. For example, when the GOP nominated Paul Ryan for vice president last year, oonly 32% of the public knew that he was a member of the House of Representatives, even though he had been a major figure politics for several years. Most are also ignorant about the distribution of spending in the federal budget, the issue Ryan was most associated with, and one that has been a major point of contention over the last few years in light of our severe fiscal crisis.

As I discuss in my own forthcoming book Democracy and Political Ignorance (Stanford University Press, to be published this fall), political knowledge levels have remained low and risen little if at all over the last fifty years, despite massive increases in education and the rise of electronic media and the internet. The problem is not lack of information, but voters’ lack of motivation to learn it. So far, there is no indication that new technological breakthroughs will change that. Huge amounts of new information are of only limited value to an electorate that often ignores basic facts that are already widely available.

Rationally ignorant voters also have little incentive to objectively evaluate the political information they do learn. Instead, they tend to evaluate it in a highly biased way, discounting anything that cuts against their preexisting views. Because the consequences of error for any individual voter are low, few try hard to objectively evaluate about new information they learn about public policy.

The combined impact of rational ignorance and bias greatly reduce the potential benefits of new information for improving the performance of democratic government. Obviously, public opinion is not the only influence on government policy in a democracy. But it does have a substantial impact, one that is affected by ignorance. John notes the problem of political ignorance in his book. But I don’t think he shows that new technology can overcome it. At the very least, there is reason for skepticism on this point, given our experience with the last fifty years of technological innovation.

Fortunately, however, we can make more effective use our new knowledge in another way. When we “vote with our feet” by choosing between jurisdictions in a federal system, or between products in the market, we have much stronger incentives to learn relevant information and evaluate it rationally. If you are like most people, you probably spent a lot more time and effort seeking out information the last time you bought a car or a TV than the last time you decided who to support for the presidency. That’s not because the presidency is less complicated than or less important than your TV. It’s because when you buy a TV, you know that your decision will make a real difference to the outcome, whereas with the presidency that is highly improbable. The same goes for deciding what city or state you are going to live in.

II. Taking Decentralization All the Way Down.

The informational advantages of foot voting over ballot box voting reinforce John’s argument for political decentralization, limiting the power of the federal government in order to allow more issues to be decided at the state and local levels. The more issues are decentralized, the more decisions can be made by voting with our feet. Sometimes, however, we can empower foot voters even more by limiting state and local governments in order to empower the private sector.

Foot voting in the private sector has significant advantages over choosing between governments. Among the most important is lower moving costs. Moving from one city to another or one state to another is much more costly than moving to a new private planned community or switching to a new service provider in the market. The latter can often be done without moving at all. Reducing moving costs is especially important when it comes to making decisions about immobile assets, such as property rights in land. In such situations, the case for limiting state authority in order to empower the private sector is at its strongest. And enforcing such limits may require the federal intervention, including by federal courts.

Transferring decisions to private hands also often facilitates exploitation of new information. Private sector actors such as property owners often know far more about their preferences and the possible uses of their assets than the government does, a point I discuss in more detail in this article. And because there are many more private organizations than governments, they are in a position to try out a much wider range of the kinds of experiments that John rightly advocates. As John Stuart Mill pointed out back in the 19th century, creative private organizations are often the ones who develop the most innovative “experiments in living.” But such experiments are more likely to flourish if not preempted by government regulations that mandate uniformity.

The informational advantages of political decentralization and privatization are far from the only issues we need to consider in deciding how large and centralized government should be. Some problems are too large-scale to be handled by any private actor or subnational government. Global warming is an important example. But information issues do tilt the scales in favor of greater decentralization and tighter limits on government power than we might support otherwise.

In order to take full advantage of the information revolution described in John’s excellent book, government needs to be smaller and more decentralized.

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