The Alternative Vote

Excellent briefing note by the Political Studies Association. The executive summary in particular is pretty informative and helps to discard the ******** that we’ve been hearing for what it is:

“The basics of AV
 – A move to the Alternative Vote (AV) would not be a radical change from the current system of First Past the Post (FPTP). AV is not a proportional system.
– Rather, AV is majoritarian: candidates win by securing a majority of the votes in their constituency. Under FPTP, only a relative majority is required; under AV, the goal is that winning candidates should secure an absolute majority.
– AV allows voters to rank candidates in order of preference. If no one wins more than 50 per cent of first preferences, second and sometimes lower preferences are taken into account.

AV’s known effects
– AV would increase voter choice – between but not within political parties.
–  AV would reduce but not end tactical voting.
– AV would uphold the principle of “one person, one vote”. Every voter would still be treated equally; each vote would count only once in deciding who is elected in each constituency.
– AV would give weight to second and lower preferences as well as first preferences. The merits of this move can be debated.
– AV is not a proportional system.
– AV would not eliminate safe seats, though it will probably reduce their number.
– AV would not cost much to implement.

AV’s likely effects
– AV would probably not change turnout at elections. Nor is it likely to change significantly the number of spoilt ballots.
– AV is unlikely to change the structure of the party system fundamentally. But it is likely to increase the Lib Dems’ seat share somewhat, at the expense of the other main parties.
– AV would probably make coalition governments slightly more frequent (but changes in how people vote mean coalitions are already becoming more likely under FPTP).
– AV would probably sometimes exaggerate landslides.
– Minor parties under AV would probably win more votes, but not more seats. AV would be likely to increase the bargaining power of some minor parties, but not of extremists such as the BNP. It did not help Australia’s One Nation party.
– AV would be unlikely to increase the number of women or ethnic minority MPs.
– AV would be unlikely significantly to change the standards of MPs’ behaviour or the relationship between MPs and voters. It might make some MPs focus more on constituency work – which might or might not be desirable.
– AV would probably reduce the tribalism of political battle only at the margins.
– A “yes” vote would probably make further electoral system change later on more likely.” (page 2)

Back from the dead? Understanding the death of Keynesianism and its potential revival

Current debates about whether to further support the economy or to focus on reigning in the  deficits are reminiscent of an older question about whether Keynesianism is dead. Regardless of what one think should be the appropriate response in the current crisis, it is clear that post 1970s governments’ attention have de facto shifted to controlling inflation, often at the expense of unemployment. Why this has happened is still not entirely understood.
The first way to approach this question is by asking what determines macroeconomic policy more generally. Here, three sets of explanations stand out.
1) The role of Ideas: the theoretical superiority of monetarism meant Keynesianism was abandoned and replaced.
2a) Interest – Partisanship: basically, this theory assumes that the left cares about the working class and the right about asset owners and high income earners. As a result, the left will favour policies that reduce unemployment at the expense of inflation, whereas the right will do the reverse (Hibbs, 1977, ;but see Alt and Chrystal, 1983).
2b) Interest – Political Business Cycle: this theory assumes that elected governments are office seekers and maximise the odds of getting re-elected, while the voters are rational but short-sighted. Governments will then expand the economy pre-election to maximise the chances of getting re-elected and tighten budgets after having been elected (Tufte, 1978; Nordhaus, 1975; but see Leiwin 1991).
3) Institutions / Corporatism: Certain institutional structures are more conducive to Keyenesian Macropolicy. This is either because of greater state capacity and a history of activist government policy (Hall, 1990; Weir and Skocpol, 1985) or because of the presence of Corporatism (institutional arrangements whereby governments, capital and labour jointly decide the direction of the economy). In the latter case, corporatism makes both more likely and more feasible for Keynesian policies to be undertaken. It is more likely because labour’s interests are taken into account and are more consistent with capital’s interest. It is more feasible because governments can mitigate the adverse inflationary effects of expansionary policies by agreeing with the social partners to moderate their wages (Schmidt, 1982; Katzenstein, 1985; Schonfield, 1984).
With respect to (1), the onset of the oil shocks and the demise of the traditional trade off between inflation and unemployment contested the theoretical predictions of Keynesianism. 
In the 1970s, only corporatist economies were capable of controlling inflation while reflating the economy. As monetarism developed and the unions’ strength decreased, this proved that it was possible to control inflation without relying on a corporatist framework. This affected (3)
Changes in the international environment meant that traditional Keynesian tools became more limited and less effective. Governments lost a lot of complementary policy tools (trade control, tariffs, state subsidies, etc). Keynesian policies were also less effective in the context of more open economies and no capital controls.
(2a) and (2b) were potentially affected by the external changes mentioned above but also by internal changes. If expansionary fiscal and monetary policy to support the economy was not effective anymore, governments lose their incentives to electioneer (i.e.: spend more to increase their chances of getting releected). Internal changes may have included convergence to the median voter or it may have moved to the right. In either case, the consequence would be that left wing parties would have to ignore the more left part of their electorate. To the extent that they are more unemployment averse than the median, this would reduce reliance on inflation creating expansionary policies.
Oddly enough, the occurrence crisis has in many respects reinvigorated Keynesianism. First, because it was successful in mitigating and shortening the crisis. Second, because as of today, no inflationary pressures are being felt. True, deficit hawks are challenging the Keynesian paradigm from a slightly revamped angle. However, most debt related problems are either structural and stem from pre-crisis issues (demographic/pension problems and health care related costs) or have been sparked by the underwriting of the financial sector. Automatic stabilisers in the form of unemployment benefits and extra social spending can hardly be blamed for current problems. Whether a new policy paradigm emerges remains an open question.

French youth unemployment rate and partisanship

This graphs shows the evolution of youth (15-24) unemployment rate* in France under different governments (red lines indicate change of governments). From the 1960s to the early 1990s, the rate increased significantly; thereafter it fluctuated between 20 and 27%. 
The Jospin government successfully reduced it to around 20% partly as a result of the “Nouveaux Services Emplois Jeunes” (NSEJ). With the unfolding of the crisis, the youth unemployment rate rose from under 20% in 2008 to around 23% in 2009. 
It remains to be seen whether the current government will prove able to address this ongoing issue. French right wing parties have not in the past been effective in resolving this problem. Partisanship alone cannot account for governments’ failure to tackle unemployment; indeed the current Socialist Zapatero government has seen its youth unemployment rate reach 38% in 2009.
What is however clear is that the current focus on cost containment and rebalancing of fiscal budget seems to be at odds with the imperative to channel more resources in order to fully address youth (and indeed overall) unemployment in Europe.

*Data extracted from the OECD stats website

Samuelson on Inflation and partisan politics three decades ago

“We tend to get our recessions during Republican administrations…The difference between the Democrats and the Republicans is the difference in their constituencies. It’s class difference… the Democrats constitute the people, by and large, who are around median inomes or below. These are ones whom the Republicans want to pau the price and burden of fighting inflation. The Democrats [are] willing to run with some inflation [to increase employment]; the Republicans are not”

Source: Samuelson P. A. (1977) Some Dilemmas of Econonmic Policy. Challenge 20: 30-31