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May 2000, Volume 68, Number 3 |
| Politics Blame-Game Politics Manipulates Voters
BUSINESS SCHOOL POLITICAL ECONOMIST Timothy Groseclose likes to ponder prickly political questions. Why, for example, do politicians propose bills they know have no chance of passage? In 1999, Republicans put forth an $800 billion tax cut bill when President Bill Clinton had said he would veto anything over $300 billion. The reason is simple: to discredit the opposition. "Both parties do it," says Groseclose, who has conducted research on this subject with Nolan McCarty, a political scientist at Columbia University. Evidence of how destructive so-called blame-game politics can be is in the numbers. "When we see the blame game model, we see the president's approval plummet at a statistically significant rate of two percentage points," says Groseclose. It may not sound like a lot, but it's double the effect produced by a one percent decrease in gross domestic product. In a case outlined by Groseclose and McCarty, members of a Democratic-led Congress passed a family leave bill in September 1992—even though they knew then-president George Bush would veto it. What is strange is that Bush would have signed a more moderate bill. Why did the Democrats choose this route when a compromise would have produced a policy that they and Bush would have preferred to the actual outcome? The research suggests that both predicaments, Clinton's tax cut veto and Bush's family leave veto, can be explained by the bargainers' attempts to appeal to an outside audience—the voters. The Republican Congress was trying to discredit Clinton by making it appear as if he didn't want tax cuts. In 1992, the Democrats wanted to make Bush look like a far-right ideologue so that voters would not reelect him that year. The tactic worked. What Groseclose, an associate professor of political economy, and McCarty are studying is an important but relatively unexplored class of game-theory bargaining problems that involve negotiators who send signals to a third party. Almost all other bargaining theories ignore the possibility that the two main negotiators want to impress a third party. Such problems are especially common in politics, where elected officials must worry about approval from voters and where leaders in international negotiations must appeal to domestic politicians and voters. Groseclose and McCarty focus on Congress and the president. Congress makes a take-it-or-leave-it offer to the president in the form of a bill, and the president either accepts or vetoes it. A third party, the voters, is uninformed about the president's preferences. But by observing the congressional bill and the president's veto decision, the voters learn about these biases. In the Groseclose-McCarty model, the president wants to appear moderate to voters, while Congress wants him to appear extreme. Even though Congress and the president are well informed, the presence of the uninformed third party of voters creates an inefficient outcome. Groseclose and McCarty's model helps explain why vetoes tend to occur more frequently in election years and, of course, during divided governments. The researchers also tested a key implication of the model—that a president's approval dips after a major veto during split governments. Data from 1956 to 1992 strongly supported that hunch: Post-veto presidential approval ratings in such periods dropped on average two percentage points. The researchers also suggest how we should bargain at both the government and corporate levels. Their model shows that negotiations break down because the involved parties have strong incentives to send signals to a third party. If, however, negotiations were kept secret, more efficient outcomes would be possible. Although there may be benefits to "sunshine laws" and other measures to keep negotiations open, Groseclose and McCarty's research shows that they may actually hinder efficiency. For this reason, negotiations sometimes should be kept secret. For instance, management and union leaders may both be better off if they can agree to not announce immediately the outcomes of their negotiations in press conferences. "Although the public generally scorns secret, back-room negotiations, our results make a mild case for them," says Groseclose. BARBARA BUELL "The Politics of Blame: Bargaining Before an Audience," Timothy Groseclose and Nolan McCarty, GSB Research Paper #1617, May 1999
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Politicians propose bills they know have no chance of passage to discredit the opposition. |
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