The Behavioral Economics of Election

Published On: October 28, 2022 08:45 AM NPT By: Pradip Kumar Kafle

After the political transition from monarchy to republic during 2006/07, many of the top leaders were found to repeat ‘My regime of 10 years would turn out the country as prosperous as Singapore'. And with increased frequency, we kind of started to believe in the falsehood. But, to an economist, that was a clean lie, technically.  

Did you cast your vote in the local level election held a few months ago or any time earlier? If yes, do you think that you voted rightly to defenestrate the bad performers out and renew the term for the good ones? You probably think you did so but economists think that may not always be the case. And, here comes the interplay between election and behavioral economics.

Election, one of the most beautiful pillars of democracy, is a periodic opportunity for citizens to punish the wrongdoers and establish the visionaries in the government. This feature, above all, has helped democracy to grow invasively in this barbaric jungle of sapiens. But, Winston Churchil had put his opinion in the US Congress (1943) saying, “Democracy is the worst form of government except for all those other forms that have been tried from time to time.” So, there is no denial of the fact that democracy and the election system suffers the limits of its own kind. Democracy assumes that political actors, both voters and potential representatives, are ideal beings who perform their roles with optimum morality and ethics. But with the erosion of trust and emergence of hypocrisy in this era, perfect democracies are only utopian day-dreams.

Economics, a bridge between unlimited human wants and limited available resources, is all about enhancing human welfare and pursuing prosperity. In the 20th century, the discipline of economics proposed by the neoclassical faced dissents from contemporary ones regarding the assumption of a ‘rational economic man’. JS Mill, in his essay of characteristics of political economy (1844) had first proposed the concept of ‘Homo Economicus’ i.e., a rational man always desires to possess wealth, and is capable of judging comparative efficacy of means for obtaining that end. Ergo, his successors also assumed that an ideal human acts rationally, that is, each action is guided by the motto of utility or wealth maximization and they utilize all the information available to make the best decision. On the counter, Simon (1968) spearheaded the opposing theories and advocated ‘bounded rationality’, that is, rationality in real life is constrained by our limited thinking capacity as well as time and information that we have to analyze the situation. Since then, a new branch of economics called ‘behavioral economics’ emerged with such vivid implications that this science has attracted 10 Nobel prizes in economics till date.     

Today, it’s a well established fact that we, humans, are boundedly rational beings, unlike the assumptions of Homo economicus. And, with this lens of behavioral economics, looking at the ongoing election saga, it’s no hard to conclude that neither of the parties, both citizens and political representatives, are fair and rational as per the theoretical assumptions of a democratic election system. Electorates are constrained by environmental influences, inherent biases and limited thinking skills, and thus often end up casting votes to jingoists or crooks. Similarly, leaders, too, are not rational actors as they are constantly in search of opportunities to exploit the behavioral biases of the voters. Now, let us lend a few established principles from behavioral economics to give a fair look at our election system.

Repeated lie ultimately seems like truth

You must have heard some big lies from the candidates during the election season. Often, they repeat the same lie again and again and they do it consciously. Behind this, behavioral science comes into play. Daniel Kahneman, a Nobel prize winner (2002) economist, in his book ‘Thinking Fast and Slow’, purports that a reliable way to make people believe in falsehoods is frequent repetition. Human cognition is conditioned in a way that familiarity is not easily distinguished from truth. In that marvelous piece, he shows how authoritarian institutions and marketers have always known this fact and acted on their own vested interest. In our case, after the political transition from monarchy to republic during 2006/07, many of the top leaders were found to repeat ‘My regime of 10 years would turn out the country as prosperous as Singapore'. And with increased frequency, we kind of started to believe in the falsehood. But, to an economist, that was a clean lie, technically. In the first place, glancing over the history of nations, no nation had ever multiplied their per capita income by more than 10 times in a short duration of 10 years. Adding insult to the injury, Singapore’s per capita income was already more than 50 times than ours. Thus, voters must always be susceptible to the big dreams that the political honchos repeatedly vomit in their speeches. 

Recent information influences behavior

In general, human behavior is a function of information accumulation, mental processing, future expectations, and etcetera. Behaviorists have widely studied this function and concluded that recent information weighs more when it comes to impact. They posit that humans unnecessarily allocate huge importance to recent information and often make biased decisions. Acknowledging this, government or institution incumbents excessively perform populist tasks and projects at the end of their tenure (or may be to avoid anti-incumbency effect). In the election cycle of five years, they only get leisure to approve national laws, maintain good relations with the neighbors, and form coalition with other parties only in the fifth year. These days, the relevance of coalition has heated the Nepali election campaigns, though their ideologies are the opposite outliers of the state conduct continuum. Further, when elections are nearer, no politician wants to get their faces dirty by engaging in much-needed debate too. For instance, a comedian has been constantly harassed and embarrassed by radicals of a particular community and administration for his joke in a comedy show, though PILFS prefer to remain silent as dumb over this issue, as recency effect may turn against themselves. So, citizens must assess their loquacious leaders with their average performance over the last five years.

Herd mentality, ever with us

Herd mentality describes how people are influenced by larger groups to adopt certain behavior on a largely emotional basis rather than rational one. If left isolated or independent, most of those decisions would have been different. Being social, we are conditioned to follow the wider mass. In many instances, we undertake decisions or actions that are not beneficial to us, economically as well as physically, just not to go against the decision of a larger group. The same is with our elections; either we follow our family members or peers to choose the electorate. Some proverbs like ‘Nunko Sojho Garnuparcha’, ‘Dharma chhadna hunna’, are used by politicians and their cronies to arouse an emotional appeal and collect votes in their favor. It’s a way to associate a political legacy with a certain breed (nasla) just for the sake of votes. But, if we sober over the existence aspect of humans, we are basically a decision making unit at our core, making millions of decisions in a day, ranging from when to wake up to what to eat. This decision making ability differentiates us from other species in the animal kingdom. So, as important as it is to cast the vote, equally important is to get aware of the herd mentality and use one’s own cognition to distinguish right and wrong.

In light of this, we Nepalis are basically irrational voters, influenced by several behavioral biases. We rarely sober over our personal thoughts before stamping the swastika aside the party symbol. We tend to believe the lies in the longer term. We are gullible enough to get hoodwinked by crooked political honchos. Thus, it seems that the Election Commission must take these things into consideration and make appropriate intervention.


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