Monday, September 03, 2007

It's non-party time!

A few weeks ago Aco, in exegesis, was ranting about 'independent candidate.' I agree with him on one thing: the term 'independent candidate' is oxymoronic. But I am less pessimistic with the idea of allowing a candidate to run without having to be nominated by political parties. Let's call her or him non-party candidate.

Aco wrote:
Whoever you are, you can't run a populace alone. You would need support, cheer, organization, funding and all that. And that my friend, is called, 'party'.
To begin with, modern democracy is representative democracy. Political parties are, supposedly, the bridge between the people (constituents) with representatives. A simple way (well, not too simple perhaps) to explain the situation is using the principal-agent setting. Parties act on behalf of their constituents, who have a set of objectives. But parties have also their own objectives to maximize. To align both sets of objectives, a certain incentive-punishment mechanism needs to be developed, which we call 'election.'

Another way to look at the role of parties is to draw an analogy with real estate agents. Like realtors, parties help minimizing the search cost for a candidate, as well as help marketing a candidate to the potential buyers.

However, in any principal-agent settings there are potential drawbacks. Due to a broken incentive structure, agent may not maximize principal's objectives. In a worse situation, agent may fully ignore the principal. Of course, we can fire sack or realtors, company executives or football managers. That can happen if the market of realtors, executives or managers is competitive enough.

What if it is not? What if parties become, or establish, a cartel-like political structure? Like any cartels, political cartel extracts consumer's (voter's) surplus and limiting choices by creating a barriers to entry for newcomers (or for new ideas). What can be done? In any economic textbook, the solutions for cartels are: a) issue regulation that dissolves cartels; b) create competitive pressure, by promoting domestic competition and/or free trade.

This is the situation in which, I shall argue, independent non-party candidate can be a solution (note that I am not claiming it is the solution). Yes, it may work, it may not. There are theories to justify either. Nevertheless, we can do empirical research on it: just compare regions (provinces or districts) where non-party candidates won, versus whose winners are traditional, party candidates. First, of course we need to define the dependent variables. It can be economic growth, corruption, speed in poverty reduction, some health or education measures, and so on. If we have enough data set, we can do a regression, controlling for region fixed effects.

Yes, there may be endogeneity. The economic, social and political situation in a region may lead to independent candidate winning (or losing, or even not bothering to run) the election. But there are some empirical strategies can be considered, like what Benjamin Jones and Ben Oken did in their forthcoming paper on leadership and economic growth (by way of Dani Rodrik).

As my concluding note: let's not making this independent non-party candidate a big fuss. Just make it possible, let the market (voters) decide whether they should trust them, or retain the hope for political parties. I believe, in the end people would choose party candidates. See the fate of non-party candidates in established democracies everywhere.

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  1. Smart and sharp analysis as Ape do(sorry for this little confusion with Ary's nicknme which is Ape not our presumed brother in the planet of the apes). I am fully sure that a.p. will become a great leader which our country has.

  2. Ah, so that's what they meant by "independent" then. Running without a listed party. I thought, alone; like what those activists out there seem to campaign for.

  3. Aco -- to be honest, I myself am not really sure what some activists are campaigning for. (Maybe they do think that one can run alone...). This is my understanding of "independent" candidate, based on practices elsewhere.

  4. in indonesia, it can be assummed 50% fundamentalist voters and 50% nationalist voters. fundamentalist voters are bound to their parties's candidate, while nationalist voters can be divided into their parties' candidate and the independent candidate. an independent candidate is in fact from the nationalist, never heard from the fundamentalist. so independent candidate to some extent is not favourable for nationalist.

  5. Hi anymatters, just to make things clear, can you explain what do you mean by 'fundamentalist voters' here? Just to avoid we're talking about different things.

  6. sorry, it's just a market observation related to brand identity and strategic positioning.