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Individual and collective action Politics: who gets what and how? Politics: the process through which individuals and groups reach agreement on a course of common, or collective, action— even if they disagree on the intended goals of that action. “Who gets what when and how” A peaceful process of determining how power and resources are distributed in a society    

Politics involves cooperation, bargaining, and compromise Politics matters because each party need to find a solution to the conflict Reconciling preferences (givens) represents a fundamental problem of governance Produces winners and losers

Determines how has influence or power: 1. The ability to get other people to do what you want 2. Creates a social order, the way we organize and live our lives 3. Provides consistency, stability, resolution

Individual vs collective action Individual action:  actions taken by one individual person, acting based on her or his personal decisions  Deciding to walk to uni instead of drive Collective action:  actions taken by a collective or group, acting based on a collective decision  The footpaths provided for you to walk on

The invisible hand 

The butcher/baker aren't making things to be nice there doing it to chase a profit, by doing that there being selfish but benefiting society/economy by bringing in money

Intuition behind the invisible hand Individual self-interest works:  People acting in their own individual self-interest are able to collectively engineer outcomes that are socially optimal

The problem is that sometimes the invisible hand fails

Sometimes people acting in their own self interest do NOT arrive at an outcome that is socially optimal 6 can result in collective action problems We see these collective action problems playing out all the time...

Collective action problem: Free-rider problem Free-riding occurs whenever people (like you!) are able to benefit from a collective good without incurring the costs of participating in its production It helps explain why some goods and services are underprovided by society and helps explain the role of government Cost is greater than the benefit  Eg street lights  Traffic lights  Education provided by the state  Health provided by the state  Voting  Doing dishes

Free-rider problem  The temptation to defect from agreements by withholding contribution to group’s undertaking while enjoying the benefits of the collective effort With increasing size, individual contributions to the collective action become increasingly inconsequential —hence individuals realize their individual contribution will not affect the collective success or failure But everyone has this option, and if everyone takes it then no successful collective action 

That one person in a group project that says there going to do work but never does

Prisoners dilemma   

A type of coordination problem Arises when individuals privately calculate that they would be better off by not contributing to the collective action EVEN when they completely agree with its purpose Examples: o Prisoner’s Dilemma (prisoners who are separately interrogated) on YouTube o Rational Choice Theory on YouTube o Nuclear arms proliferation

Collective action problem: tragedy of the commons Tragedy of the commons



when people making choices in pursuit of their own self-interest arrive at outcomes that are not in the group’s best interest (Hardin, Science, 1968)

Tragedy of the commons on YouTube The concept of “rivalry” helps explain the tragedy of the commons and why some goods and services are overused “race to the bottom” Optimising for self in short term isn't optimal for everyone in the long term

Summary: collective action problems Two types of collective action problems: 1. Tragedy of the commons 2. Free-rider problems Means of differentiation:  Characteristics of the good or resource being examined

Non-excludable  impossible to exclude users (like you and me) from consumption Rivalry 

if consumption by one user prevents simultaneous consumption by other users

Homo economicus Both collective action problems (TOC and free- riding) and the Invisible Hand argument rely on an idea that people are purely rational, and make decisions in their own self-interest = Homo economicus

Is the “rational man” really a reflection of how people behave? When you examine peoples’ behaviour, most people are much more complex  People are altruistic, cooperative, strategic, and respond to reciprocity 

Golden Balls example: bit.ly/GoldenBallsTV

Theory would predict that if both players were acting in their own self-interest, they would both end up choosing steal, but they don’t. Why not?

How do we solve collective action challenges?

    

How you answer these questions will affect the type of remedies that you prescribe to solve them How society devises solutions to collective action problems operates in much the same way this will help you understand the public policy process and help explain how civil society actors and business engages with the policy process to exercise influence Core policy issue is therefore one of ensuring collective action to facilitate production of, and access to, goods Role usually assigned to government (although not exclusively)

Role for government 

Public good aspects are often a rationale for government finance through: 1. Fees (e.g. prescription, dental). Still loss welfare as leads to inefficient exclusion where people excluded even though benefit>cost 2. ‘Privatizing’ (excluding) a public good through establishing property rights - patent system 1. Direct finance, funded through general taxation 2. Other financial incentives/compensation-permits

Resource Allocation  

The economic approach is essentially private/individual, and operates through markets The political approach is essentially Public and operates through the Government or the State

“What should the role of each be in the allocation of resources?”

Todays takeaway     

Do my individual actions really matter, given that there are so many other people whose actions are shaping an outcome? Yes = individual action = collective action Outcomes can be efficient (socially optimal) = the invisible hand Outcomes can be inefficient (not socially optimal) = free rider problem and tragedy of the commons How government and society devise solutions to collective action problems is the topic of the next lecture

Institutions Recap    

On Tuesday we talked about two outcomes that can result from humans acting in their own self interest These outcomes can deliver outcomes that are good for all (the Invisible Hand) or not (Collective action problems) Payoffs for society are better overall when people cooperate But how do we make this happen?

Lecture outline    

Resolving problems of collective action = institutions Introduce institutions Formal and informal institutions Government and institutions

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Democracy

Institutions (rules) • To over come collective action challenges society designs and implements institutions Institutions are the rules of the game in a society or, more formally, are the humanly devised constraints that shape human interaction” (North 1990, p.3)

Collective action problems and solutions

Impact of compulsory voting

Resolving collective action problems

Institutions: formal and informal    

All of these rules are institutions Some are formal (written down) - laws, statutes, legislation, policy Some are informal (not written down) – social norms, cultural norms, beliefs, values When enforced, all of them guide, constrain, and incentivise our behaviour

Formal rules matter

Informal rules matter   

Until 2002, there was practically no enforcement of parking tickets incurred by diplomats at the UN If incentives trumped culture, you’d expect diplomats from every country to behave the same BUT researchers found that the diplomats incurring tickets correlated with measures of public corruption in home countries

Group size   

When the group size is small, informal rules are enough to govern society (Ostrom 1992) Group members are able to communicate easily and build trust The threat of reciprocity encourages people to behave cooperatively

Governments and institutions   

As group size increases, institutions become essential People require external coordination devices = states are established to coordinate large groups that are defined by geographic borders Governments rely on both formal and informal rules to guide behaviour

Forms of government: democracy  

Democracy: A government under the direct or representative rule of the people of its jurisdiction Francis Fukuyama “the end of history” (1989)

Forms of democracy

Representative democracy:  Representative democracy is a variety of democracy founded on the principle of elected people representing a group of people Direct democracy:  Direct democracy is a form of democracy in which people vote on policy initiatives directly. Two leading forms of direct democracy are participatory democracy and deliberative democracy

Direct democracy  

Ancient Greece and aristotle Classical writers such as Plato and aristotle experienced 'direct democracy' where small city states are directly governed by the people

Forms of government: authoritarianism, totalitarianism and dictatorship authoritarian government  is characterised by highly concentrated and centralized power maintained by political repression and the exclusion of potential challengers Totalitarianism  an extreme version of authoritarianism  it is a political system where the state holds total authority over the society Dictatorship  is defined as an autocratic form of government in which the government is ruled by an individual

Forms of democracy and authoritarianism

Contemporary types of political systems Liberal democratic:  Representative and limited government  Rights and law  Regular elections  Constitutional framework for political competition Authoritarian:  Limited political participation  Leaders above the law  Practical constraints on power Semi-authoritarian  Hybrid  Competitive authoritarian

Liberal democracy Defined: Strongly established constitutional protections and freedoms   

Govts are constrained; citizens have rights; free and fair elections Minorities can be protected from the majority But is “liberalism” more than this?

Waves of democracy

Electoral democracies  

Elections = Democracy? Electoral democracies, according to Freedom House, 2015:

Trends in democracy  

Since the end of the Cold War (1989), there has been a change in the way democracies fail Coups were much more common during the Cold War period (1945-1989); since then, it is more commonly fairly elected leaders undermining democracy

Illiberal democracies   

• We’ve seen a rise in populist movements (illiberal democracies) around the world “a kind of authoritarian politics featuring popular elections but showing little respect for the rule of law or the rights of minorities” – Dani Rodrik, 2017 Eg. USA, Europe’s right, Philippines, Brazil etc.

Economist democracy index

IDEA: the global state of democracy International institute for democracy and electoral assistance

IDEA: New Zealand

Percentage of people who sat its "essential" to live in a democracy

NZ youth less focused on democracy  

Percentage of people who say it’s “essential” to live in a democracy – by decade of birth Support for non-democratic alternatives in US and Europe:

Support for non-democratic alternatives    

Millennials more indifferent to democracy 33% Dutch millennials rated importance of democracy 10/10; in the US 30% US; 1995: 16% of 1970s think democracy bad; 2015, 20% US; 2011, 24% of millennials say democracy bad or very bad system

Colmar Brunton survey 2018     

Survey of the New Zealand public about Parliament - bit.ly/SurveyofNZpublic 60% “believe big business and vocal minorities are the ones who influence Parliament” 37% “feel there's no point in trying to influence Parliament as nothing will change” 21% “feel a sense of ownership of Parliament” 16% “feel connected to Parliament”

Democracy relies on formal and informal rules  

Democracy relies on formal rules (voting, representation, constitution) and informal rules (trust, communication etc) Because democracy depends on norms and supporting institutions even minor deviations can contribute to norm erosion

New Zealand Approach to governance   

New Zealand (and most democratic countries around the world) use mixed approaches to encourage cooperation eg. NZ Constitution Aim is to design institutions that balance the moral and generous side of human nature with policies that regulate self- interest in an efficient and equitable way How New Zealand government works is the topic of the next lecture

Todays takeaway     

Institutions = system of rules that guide human interaction = can be formal or informal When groups are small, self-governance is possible As groups get larger, trust and communication systems are harder to maintain = external governance systems developed ie governments There are different forms of government and different forms of democracy Democracy relies on both formal and informal rules to operate effectively

Government and democracy Three branches of government

What is a legislature Legislature: (parliament)  Multi-member representative body which considers public issues and accepts, amends or rejects proposals for new laws and policies Danziger:  ‘Structure in which representatives of the people discuss, assess, and enact public policies’ Newton and van Deth:  ‘The branch of government mainly responsible for discussing and passing legislation, and keeping watch on the executive’

Lower chamber names

Parliament in NZ  

One of the world’s oldest continuously functioning national parliaments First met in 1854

  

NZ Parliament normally has 120 elected members Parliamentary term of 3 years Sits about 30weeks/year (90 days)

Parliament in 2021

Parliamentary stats, 2017-2020        

255 calendar days sitting 1522 sitting hours 169 hours of urgency 202 Government bills 19 Members’ bills 395 petitions presented (209 of which were reported back to the House) 2,800 oral questions asked Copperfield’s cafZ:146,314 espressos

Parliamentary complex

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Beehive Parliamentary wing Library

Main functions of legislatures

Size of parliament - 120

Select committees      

Select committees have been a feature of our parliamentary arrangements since 1854 Select committees are the workhorses of NZ’s parliamentary system – are made up of MPs from all parties and serviced by officials 18 permanent committees 13 are subject committees – commerce, health, foreign affairs, education etc 5 committees deal with different aspects of parliamentary business – the Business, Standing Orders, Regulations Review etc ”...the best means, consistent with our constitutional tradition, of providing a parliamentary check on executive and administrative power” (Royal Commission on the Electoral System, 1986, p.20)

Parliamentary chamber

 

Gov on left Opposition on right

Roles in parliament

Parliamentary roles

Parliamentary chamber in 2021

Modernisation of parliament

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Dress code changes o Changing law of wearing a tie

A site of protest

Theories of representation Trusteeship:  Representatives exercise independent judgement Delegate:  Representatives convey the views of others Resemblance:  Representatives should constitute a microcosm of larger society Mandate:  A party gains authority to implement its policies

Electoral systems Electoral system:  General term for the rules governing an election, including the structure of the ballot, the electoral formula (how votes are converted to seats), and districting o Electoral systems have a huge influence on a country’s party-system, government-coalition, representation etc o Electoral reform – changing the electoral system

Main electoral systems Single-member plurality:  Electoral system based on districts that each have one representative, and in which the winner is the candidate with the most votes, but not necessarily a majority of those votes Majority electoral systems:  require the winning candidate to obtain a majority of votes, either through a two-round election (also known as a runoff election), or using an alternative vote arrangement Proportional representation:  Electoral system in which the number of seats won by each of the competing parties is proportional to the number of votes they each win Mixed systems:  involve a hybrid of plurality and PR systems, designed to maximise their respective advantages and minimize their disadvantages

First past the post   

FPP was New Zealand’s voting system before MMP There is no party vote, and the representation each party has in Parliament is determined by how successful their electorate candidates are Candidates don’t need more than 50 percent of the vote to win an electorate seat, just more than their closest opponent

Proportional representation   

 

The share of seats that parties win in the House of Representatives reflects the share of votes they win This is not the case in Australia, Britain, Canada or the USA NZ currently uses Mixed Member Proportional (MMP) – the voter has two votes: an electorate vote to select their local MP to represent their geographical area and a second more important party vote that helps determine the overall proportion of seats. Eg - 20% of the party vote = 20% of the seats in Parliament Not entirely ‘proportional’ – a threshold of 5% of the party vote; parties that win at least one electorate seat are exempted from the threshold requirement Currently Parliament is made up of 71 geographic electorates (64 general seats; 7 Maori seats), and the MMP formula means there are normally 49 MPs elected by the party lists, producing a total of 120 MPs

Outcomes of MMP: rise of minor parties

Outcomes of MMP: shift to coalition governments

Party "families" Common ideological families: 1. Social democratic parties 2. Liberal/conservative parties 3. Populist parties 4. Libertarian parties 5. Ethnic parties 6. Environmental 7. Christian/Religious

Median voter theory  

Politicians care about what you want because they want to keep their jobs (working in their own self interest) “Parties formulate policies to win elections, rather than win elections in order to formulate policies” (Downs, A..1957. An Economic Theory of Democracy., p.28.)

Median voter theorem

We do sometimes observe this 

Historically, two party systems with majority voting have been associated with centrist politics

But sometimes we don’t     

Voter behaviour and government architecture often violates the assumptions ...