5 - Amenity potential, indivisibilities, and political competition

Summary

My concern here is with a central debate in modern political economy – the degree to which constituency interests are accurately represented by democratic institutions. Those on one side of this debate believe that legislators accurately represent constituency interests. Such representation may not lead to the policy the median voter most prefers because special interest groups carry more political weight than would be proportionate to the number of voters who are members of them. But, just as wealthy people secure larger shares of private sector output than poor people do, so organized groups secure larger shares of public sector output. In this sense, voter sovereignty prevails in politics as effectively as consumer sovereignty prevails in markets. From this perspective, their constituencies effectively control legislators (Becker 1983; Peltzman 1984, 1985).

Those on the other side of the debate believe that legislators exercise significant freedom from the preferences of their constituencies and that they exercise this through political behavior that deviates from behavior that would serve their constituencies. Presumably, deviations favor legislators' ideological preferences, not those of constituencies. Because this view sees that the interests of constituencies diverge from the behavior of legislators, it relies on the proposition that agency cost in politics is important enough to allow legislators to retain office even when they substitute their own political preferences for their constituencies' interests (see Kalt and Zupan 1984, in press).