Thursday, January 26, 2006

The Incumbency Conundrum

R. Emmett Tyrell, Jr., who is a national treasure, has an absolutely hilarious column today on the rudderless performance of Sen. Edward Kennedy during the Judge Alito confirmation hearings, and indeed throughout his recent Senate career. It prompts the very obvious question of why the voters of Massachusetts keep returning a man who is widely acknowledged to drink to excess (and who, by the way, killed a woman) to office term after term. Nothing better than the continuing presence in office opf the distinguished senior senator from the Bay State illustrates how difficult it is to dislodge incumbent politicians.

One of the most insidious trends in modern American governance is the growing advantage to incumbency. The American constitutional experiment relies on three prongs to maintain ordered liberty – separation of powers, federalism and elections. The first is subject to ebbs and flows over time, with the President’s authority rising and falling with national crisis, and recent decades having seen the judicial branch more and more being the arbiter of our disputes. The second is also eroding, mainly due to the substantially increased role of the federal government in regulating economic life and redistributing income; its expanded power of the purse also allows it to impose its will on the states by threatening to withhold funds.

But the competitiveness of elections has been in decline for some time. Incumbents in the U.S. House are routinely re-elected at a rate in excess of 90% (over 95% in recent years), and even in the Senate, where incumbents do not benefit from favorable district-drawing, re-election rates are well over 50%. (I have seen no data, but would be surprised if the same were not true in state legislatures.) While in no sense is unalloyed democracy consistent with protection of liberty, voting serves as one tool among several of restraining a government that has overstepped its bounds, and so the decline of competitive elections is of concern.

Why has it happened? In the economic model of democracy, incumbents carry several advantages. Their marginal fund-raising costs are lower, because most of their search costs of finding likely donors are sunk in the course of getting elected the first time. They benefit from subsidies in the form of mailings to constituents and so on. Precisely because they are already elected, incumbents are on average better candidates than challengers. (Statisticians call this selection bias.) And once in office, particularly if they are on important committees or in the majority party, they may allocate goodies to their constituents (although one district’s benefits are someone else’s costs). Incumbents in power probably have cost advantages in bargaining with state legislators who redraw districts after every census at both the state and the federal level.

Some of these effects are clearly more or less constant over time. However, improved technology has made redistricting a much more scientific enterprise. And the rising cost of elections accentuates the advantage of incumbents, and perhaps more critically, incumbents have used outrage over previous scandals to enact entry barriers to potential challengers by restricting fundraising. Given incumbents’ experience, they will always benefit both from shaping the fundraising rules to begin with and having more experience with a donor base that can be made to conform to the new rules. And it is also possible that incumbents are reelected at a higher rate because better polling technology has allowed those who are likely to lose to know ahead of time and hence not run. But the first chart in this study indicates that is unlikely. The rate at which incumbents choose to run in the U.S. House (as of 1994) and overall reelection rates there are as high as they have ever been.

If we accept that incumbents should have to compete for votes, two factors that are mechanically if not necessarily politically easy to change are redistricting and campaign finance. Many advocate “nonpartisan” redistricting, but this is probably a fantasy. There are very few politically knowledgeable people who are “nonpartisan,” and partisans (which is to say, most voters) would probably not trust the results in any event. This may be why the referendums proposing such redistricting, so popular with “good government” types, often lose.

Campaign finance is another matter. In most markets, low-quality producers are displaced through entry. Entry has costs in any market, but there are few legal restrictions on raising funds to open a restaurant or produce a better computer. But political markets are different. Potential entrants must navigate a maze of fundraising restrictions, including the recent and very complex McCain/Feingold legislation. These entry barriers stifle political entrepreneurs. People forget that the late Eugene McCarthy was only able to oust Lyndon Johnson on an anti-war platform because at a critical juncture he got funding from a handful of wealthy men like Stewart Mott and Jack Dreyfus, Jr. Such an insurgent campaign would be impossible today. Despite the hysteria of campaign-finance “reformers,” money – willingness to pay – is how market participants make their views known as surely in political markets as in any other.

And as many have predicted, McCain-Feingold is actually a link in a chain going at least back to 1974, when other “reforms” were enacted in the wake of Watergate. Sen. McCain has pursued the white whale of elections without special interests (and we are in the end all special interests) for years, mainly because he took offense at being caught up in the Keating 5 scandal, when five U.S. Senators, including Sen. McCain, were accused of trading money for favors for savings-and-loan fraudster Charles Keating. If you want some chilling reading, look at this prediction about the direction restrictions on speech designed to dislodge incumbents will take in the wake of the Supreme Court’s upholding of McCain-Feingold. More campaign-finance restrictions means less speech, which means more incumbency advantages, which means less accountability, which means less freedom in the end. Allowing politicians to set the legal rules of political competition is like allowing Microsoft to set the legal rules of software competition.

Throw the bums out? The polis is increasingly too enfeebled even to lift them off the ground.


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