Referenda in light of voter ignorance

As mentioned in class, the purpose of many organizations like "Rock the Vote" is to increase the percentage of voters in each election. Other nations around the world attempt to increase voting through mandatory laws or various penalties. This fails to address the concern of voter ignorance, which can be problematic if this prevents citizens from voting in the best interest of themselves or the society. This phenomenon has been brought up recently regarding Brexit, the decision for the United Kingdom to leave the EU. According to the Washington Post and Google Trends, after the referendum top Google searches in the UK included "What does it mean to leave the EU?" and "What is the EU?". This seems to support the idea that some level of voter ignorance existed when voters entered the polls. If citizens are indeed unable to support the side that would benefit them or society the most, one must consider whether our current paradigm is the best.

While no developed country necessarily discourages the public from voting, the extent to which referenda are proposed to the public varies widely between developed nations. This may be a proxy for level of trust a nation has in its voting populace since instead of having elected officials pass legislation, a referendum directly asks the citizens whether a law should be enacted. The U.S. constitution does not include referenda, but state and local governments often use them to decide on contentious issues. Even at these levels of government, it is likely many voters will remain rationally ignorant and still vote. This fact may have contributed to Belgium's former foreign minister saying: "I'm glad that we have no referendums. How for God's sake are you going to explain a complicated thing like the Euro in a yes-and-no question to voters?" While the costs of becoming informed enough to vote in your best interest have decreased due to online information and political parties endorsing stances on issues, it is still unclear to what extent to rely on the populace to make important decisions.

If voters participate in the referenda process because they overvalue the probability of their vote changing the outcome, it may make sense to reduce the number of issues citizens have the chance to vote on. However, if the act of voting and or being able to express one's opinion is a large benefit to a group of citizens such restrictions may reduce the overall utility of the populace even if we assume elected officials will make better decisions given that they are better informed. 

The Rationality of (Writing about) Voting

In a recent New York Times op-ed, "Vote as if it Matters", the author, Paul Krugman argues that the high number of young voters who want to vote for a third party candidate (such as Gary Johnson) in the upcoming election poses a threat to the outcome of this year's presidential race.  The author continues his point by stating that if one wishes to vote for Gary Johnson, then that means he or she must be indifferent about whether Trump or Clinton wins the election. 

In contrast, the economist Johnson (not the presidential candidate) would argue that each individual's choice to not vote for Trump or Clinton does not mean that they are indifferent about that outcome, but that their expected benefit of voting for either candidate is not enough for them to cover the costs of voting.  In fact, someone could have a strong preference for one candidate, but if she is rational, then she will realize that her vote has little chance of making a difference.  
Since the voters for Gary Johnson must realize that they have nearly a zero-percent chance of casting a winning vote, then they must be doing so for a different reason: likely they want to vote as a form of expressive behavior.  
Overall, Krugman's argument does not hold up against economic logic.  He writes that "your vote matters, and you should act accordingly." For each individual, his vote does not actually matter (barring a miraculous circumstance). However, Krugman has an incentive to encourage others to vote, since his article is aimed towards partisan readers, and he believes that his article could encourage readers to vote for his preferred candidate   By writing an article, Krugman incurs no costs that are not covered by the benefits of publishing an article, so it is rational for Krugman to encourage others to vote, as a larger group of people could have a slightly higher chance of actually affecting the election results. 

Bridges - deteriorating public goods

As mentioned in class, bridges (like highways, dams, levees, etc.) serve as a great example of a public good. Bridges do not classify as a perfect public good, because, while nonexcludable, they contain a certain degree of rivalry: too many cars can decrease the consumption of other drivers (similar to people on sidewalks). The free rider problem and the inability to exclude people from consumption produces an opportunity for government provision of bridges and other goods, something Friedman describes in Capitalism and Freedom. Friedman mentions that since high access roads have many entry and exit points, it is exceptionally difficult to charge drivers for the specific roads that they traveled on. High access bridges face this problem to a lesser extent - it is possible to place tolls on states' most highly trafficked bridges. Some states have already implemented tolls, such as the Chesapeake Bay Bridge Tunnel Toll. Since they are public goods, bridges are in part funded by the federal government, in addition to state-raised funds.

Recently, however, state governments need to look into options to "close the gate" and charge drivers for their consumption on bridges, since federal funding for bridges is declining. The Highway Trust Fund is the federal government's main way of funding bridge repairs, yet was projected to go broke in 2015. The trust fund is comprised of revenue from a federal gas tax, so as that decreases, states clearly need to look for alternative sources of funding for bridge maintenance and repair.

Deteriorating bridges and a lack of bridge funding may not seem like a pressing issue, especially since the most famous bridge collapse in the US occurred over nine years ago, in 2007. Yet research into bridge inspection data proves otherwise: 25% of the nation's bridges have exceeded their 50 year lifespan, and of the 600,000 bridges in the US, over 61,000 are rated structurally deficient. As previously mentioned, funding for bridge maintenance and repair is insufficient. According to the American Society of Civil Engineers (ASCE), $76 billion is needed currently to repair or replace deficient bridges. In comparison, Congress has allocated that amount over the past 30 years to states for bridge maintenance.

As bridges continue to deteriorate, perhaps consumers will reveal their preferences by moving to communities that best satisfy their preference patterns for public goods, or in this example, bridges. Tiebout writes in A Pure Theory of Local Expenditures that "moving or failing to move...reveals the consumer-voter's demand for public goods" (page 420). If consumers move from a state with a high number of structurally deficient bridges to a state with a low number of structurally deficient bridges, then they are expressing their preferences for communities with safe bridges, all else equal. It will be interesting to see if citizens will move from brown states (PA, IA) to light pink states (GA, TN), shown in the map by Business Insider below, as bridges, a public good, continue to worsen.

Tiebout and Charlottesville's Taboo Population Growth

   When we talked about Tiebout's "seventh assumption" in class, I was skeptical on how a community could actively limit growth, what I have found out however, is that my own city is try to do just that! To paraphrase Tiebout, communities above the optimal site try to raise average costs to keep population levels down to ensure that each citizen's needs are met and the resources are used at an efficient level. When Charlottesville came in at number 1 on theYahoo Real Estate and Sperling's  "Best Places" list in 2011, it helped spark a growth in population that was at the same time anticipated and unwelcome.

  In a 2013 forum held by Advocates for a Sustainable Albemarle Population (ASAP), realtor Jim Duncan advised the attendees, "'we don't want to restrict growth, and I think saying 'no growth is absurd''... but 'saying 'unbridled growth' is equally absurd."' His opinions mirrored the conclusion that  ASAP reached which was that the combined Charlottesville-Albemarle "community should not grow from its current population of about 145,000 past the 165,000 mark." In order to quell this growth, the following solutions were proposed: evaluating development proposals and raising rent and property values. However, two years later, according to the 2015 census, the total population of Charlottesville is 152,300 which is around a 5% population increase, meaning the Charlottesville-Albemarle community is getting closer and closer to the proposed cap, and residents can already see the detrimental effects of this growth in terms of environmental and infrastructure problems. The Daily Progress made a good point in this 2015 article when the president of ASAP was quoted saying, "there is no indiction that the free market encourages neither treating everyone equally nor the conservation of scare resources... all of us can see the value of a free market up to a point. If we talk about how growth is good, it may make us feel good but it does nothing to assure the protection of the environment or sustainability."One area that is being seriously affected is schools, there are now 39 "portable buildings," essentially trailers at county schools which have been shown to be isolating and time-wasting. This will prompt a proposed budget increase that may manifest itself in taxes, prompting residents to think critically about the education their children are receiving and decide if living in this community is worth it. It remains to be seen how we will grow over the years and whether or not it is really possible to slow down or stop the population growth.

Pipeline Protester: 'Our Rights as Native People'

In North Dakota, the construction of an oil pipeline has ceased due to the Standing Rock Sioux Tribe's protests. The Native American protesters oppose the pipeline because it crosses sacred Sioux burial ground and additionally they fear that it could pollute local drinking water. Energy Transfer Partners, the company that owns the pipeline, was given full property rights to the land by the U.S. Army Corps of Engineers, but the Obama administration stepped in and halted construction of the pipeline so that the Corps can reevaluate their decision to approve the pipeline.

This is an example of poorly defined property rights resulting in conflict over negative production externalities. The pipeline is a negative externality to the Native Americans because they would be left without compensation for polluted drinking water and the destruction of their sacred burial grounds. Perhaps the two groups could have negotiated to find a Coasian solution if the pre-requisite of clearly defined property rights had been met. However, this incident demonstrates that it is difficult for the government to delineate property rights so finding a Coasian solution is not always possible.

The Cross Bronx Expressway, Externalities, and the Shaping of the Modern Bronx

In 1948, New York City Urban Planner Robert Moses began work on his Cross-Bronx Expressway,  a six-lane highway running East to West across the Bronx that was designed as a means of transportation into the city for commuters that lived in Long Island and New Jersey. The project was controversial at the time and continues to draw criticism today by those who argue that the highway favored a wealthy demographic that could afford cars over the neighborhoods of poor families in the Bronx that were left worse-off because of the externalities created by the expressway. New York City paid families $200 a room to vacate apartments that were in line with the expressway route. While the payment of those displace families ameliorated their displacement to some extent, speaking retrospectively this value does not seem to come near an allocatively efficient solution. First, it did not account for the families and businesses that remained near the expressway and saw their property value drop sharply as the noise from the expressway created a massive externality. Additionally, the wealthier families that previously lived near the highway moved South into Manhattan or were pushed North into Westchester County, leaving many buildings vacant in the South Bronx. The construction of the the Cross Bronx Expressway still has visible affects on the South Bronx, but they likely reached their peak in the 1970s, some building owners chose to burn down their properties to collect the insurance return, realizing that this was not more profitable than expending the resources to maintain largely vacant apartment buildings. The 1960s and 70s also saw the rise of gangs in the South Bronx, a result of the rise of poverty and lack of policing in the post-expressway Bronx. If the Cross Bronx Expressway had been constructed by a private company, there may have been a Coasian solution that came somewhere near an allocatively efficient outcome, perhaps paying neighborhood families enough to negate the externalities and keep them from moving out of the area. Instead, the Bronx was left largely poor and lacking the resources for revitalization.

President Jimmy Carter visiting the South Bronx in the late 70s

1950s construction of the Cross Bronx Exressway