Why does American politics seem so deadlocked? The media mostly focuses on issues where Democrats and Republicans refuse to compromise because they strongly disagree: immigration, guns, health care. But American politics often seems deadlocked even when both parties agree. For example, supermajorities of both parties want to protect DREAMers, but they’ve never reached an agreement to do so. How is this possible?
1. Transactions costs. Hammering out a deal is hard work, so many mutually beneficial deals don’t happen.
Critique: Economists routinely appeal to these alleged costs, but how high can they possibly be? Seriously, why should it take more than a single day for the DREAM Act to become a law? Vote, vote, sign, done.
2. The hold-out problem. Suppose we agree that X is good, but you want X a lot more than I do. In this situation, it makes sense for me to demand some “compensation” from you even though we basically agree.
Critique: This might make sense for a year or two. But if we’ve failed to reach an agreement after many years of negotiation, you’d expect both sides to moderate their demands to cut their losses. Yes, they could conceivably be investing in their reputations for intransigence to secure favorable terms in the future, but does anyone seriously expect to see the day when one party finally submits to the other?
3. Insincerity. For example, perhaps Republicans only claim to want to protect DREAMers in order to seem nice and reasonable. In fact, however, they never genuinely favored the DREAM Act in the first place.
Critique: This is often plausible, but it’s hard to see it as a general explanation. Politicians have clear incentive to lie about their goals, but why would average citizens bother to lie in anonymous polls?
4. Partisan bitterness. The two main parties intensely dislike each other. Like a quarrelsome couple, they could find something to fight about at a fancy restaurant on Valentine’s Day. As a result, the two parties have trouble cooperating procedurally even when they agree substantively.
Critique: This is my preferred story. What I wrote about divorce a decade ago cleanly explains political deadlock as well:
Unfortunately, the Coasean argument overlooks a pretty obvious fact: Couples contemplating a divorce often hate, loathe, and despise each other. We’ve all heard of stories of divorcing couples deliberately destroying objects of sentimental value to each other. Indeed, many couples in this situation wallow in petty spite; they can’t stop bad-mouthing each other to anyone who will listen.
With these facts firmly in mind, how confident are you that Coase’s zero transactions costs assumption is remotely true? At risk of sounding Austrian, transactions costs are subjective: Bargaining with your mortal enemy hurts.
If this story seems grim, I should add that bitter politics has one major advantage over bitter divorce. Namely: Partisan bitterness throws much-needed sand into the gears of the state. Given public opinion, amicable government is likely to be big government. As long as political antipathy is too shallow to cause civil war, both libertarians and pragmatists should welcome it. Will Rogers once mused, “Be thankful we’re not getting all the government we’re paying for.” I’d add, “Be thankful we’re not even getting all the government both parties support.”
P.S. I’m well-aware that deadlock locks existing bad policies in place, too. But I see little political support for repealing such policies, and broad political support for adding new bad policies. Tragic, but that’s the world we live in.
READER COMMENTS
Maniel
Feb 19 2019 at 4:24pm
Excellent post. As a tax-paying, American citizen, the word which strikes terror into my heart is “bipartisanship.”
Matthias Goergens
Feb 20 2019 at 6:36am
Bryan, I guess you welcome the American government shutdown in general?
I read some article discussing making continuing resolutions automatic. And the author concluded that doing so would just remove most of the disincentives to brinkmanship, and would effectively lock the budget in nominal terms. Thus making it shrink in real terms. The author saw that as a downside. But it would actually be a brilliant graudal austerity plan.
(But I’m in Singapore, so spectate on weird American politics from a safe distance away.)
Maniel, even worse is equating bipartisan with non-partisan. Like the Blues Brothers’ both kinds of music.
TMC
Feb 20 2019 at 12:01pm
I agree with Insincerity. The democrats got an offer for what they asked for, almost double actually, and then they dropped the issue without a deal. Almost like they never really cared about the Dreamers.
Fred-in_PA
Feb 21 2019 at 12:30am
I wonder if #3, Insincerity, isn’t the driver (with #4, Antipathy, figuring majorly as the context). The Dreamers are more valuable to Democratic politicians as a propaganda cudgel for beating Donald Trump than they could ever be as grateful non-voters.
Others have noted that our politicians collect campaign contributions (and votes) with the promise of solving some problem. (This will be especially true with respect to single-issue voters.) But if those politicians actually did solve the problem, if would cut off their future stream of support from these voters & contributors.
(You raise the preferences of average voters in your rebuttal. But those voters aren’t the ones who get to decide.)
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