Voters as Investors: A Rent-Seeking Resolution of the Paradox of Voting

Abstract

Although the economic approach to politics has generated many insights into the workings of the political process, economists have not made much headway toward providing a satisfactory explanation for observed voting behavior in democracies. Downs (1957) and Tullock (1976), for example, have analyzed the voting decision within the context of a simple benefit-cost model. Put in these terms, it is astonishing that anyone ever bothers to vote. The probability that any one vote will be decisive in an election is vanishingly small, and so the expected benefits of voting cannot exceed the costs of registering and going to the polls for more than a few citizens. In order to account for the relatively high voter turnouts that do occur—more than 80 million ballots were cast in each of the three most recent U.S. presidential elections, for instance—an alternative hypothesis has been put forward emphasizing the consumption rather than the investment aspects of voting (see, e.g., Riker and Ordeshook, 1968). The main idea here is that utility may be derived from participating in an election that is independent of the outcome (for example, from the exercise of one’s “civic duty”). Peer pressure and other “sociological” factors have also been suggested as influential in the decision to vote.¹