Centre for Development Economics
Department of Economics,
Delhi School of Economics
ANNOUNCE A SEMINAR
Democracy and the Marginalized
Jaideep Roy (University of Bath and Shiv Nadar University)
This is a joint work with Debabrata Datta, and Bibhas Saha.
Thursday, 22 July 2021 at 3:00 PM
Economic marginalization is a growing phenomenon across all nations rich and poor. The marginalized population carry attributes that make them indifferent to the benefits provided by market-based policies as well as standard public goods like infrastructure, health, and education. Instead, they require direct transfers from the government to sustain their lives. As these transfers affect the quality of public goods, appeasing the marginalized is disliked by the regular voters. What impact do the marginalized have on the ideologies of political leadership and the consequent public policies in representative democracies?
We find that in an otherwise predictable electoral process that respects the standard Hotelling-Downs features of a two-party contest, the presence of the marginalized can bring about ideological as well as policy uncertainty even when there is no intrinsic uncertainty in the environment. When the size of the marginalized is small (less than a third), both parties select leaders who only serve the regular voters. Consequently, the marginalized do not vote, are left with no political voice, and the regular voters get their most popular policies. In contrast, when this size is large (though not necessarily forming a majority), democracy gets captured by the marginalized with both parties selecting pro-marginalized leaders. However, the marginalized stand politically divided as their votes get split between the two parties each supporting direct transfers to them. Though this is disliked by the regular voters, each party still offers their most popular policy in the market economy. Predictability of political ideology and economic policy is compromised when the marginalized are neither too many nor too few. In this case, each party elects a pro-marginalized leader with positive probability, and whenever the resulting leadership is ideologically distinct, the election resembles a Matching-Penny game at the stage where parties announce their policies for the market economy: each leader opts — with positive probability — for an economically extremist policy in the market economy that is unpopular amongst the regular voters. As a result, the preferences of the regular voters get politically ignored even if the marginalized are a minority. It is here that the marginalized find political solidarity that is obtained whenever only one party becomes pro-marginalized and receives all marginalized votes. These features are robust to whether parties maximize votes or are driven by the prospects of an electoral victory except that when parties are office-seeking, the ideology-profile of party leadership becomes indeterminate whenever the size of the marginalized is intermediate.
We report how the size of the marginalized affects the welfare of the different population types, the incidence of political solidarity of the marginalized, the chances of having a pro-marginalized government and that of policy extremism. Finally we show that the emergence of elite voters who are not affected by the public sector, but may have an ideological bias in the market economy, has three defining effects: they help (weakly) the economic conditions of the marginalized, can reduce the political and economic uncertainty brought about by the presence of the marginalized, and influence policies for the market sector by bringing them closer to their own bias, thereby hurting the regular voters — or the middle class — even more.
Please find the link to the meeting below:
Meeting ID: 935 2390 5583