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Anyone who has observed the chaos of local politics has seen the Machiavellian dynamics of a municipal committee elected by the town. The best example is seated on the town council. The incentive structure of the council members; is driven by the fact that their position is secured or eliminated by the will of the people. Setting up the classical variables for any Public Choice analysis, as the council members tailor their platforms and rhetoric to the voter preferences. If the same council members are either reelected or run unopposed, there is the incentive to form a coalition with the other recurring council men, formulating an informal agreement to have each other’s back. Effectively creating a cartelization since the other sitting council members have consented to support your policy prescriptions and justify your controversies. Per Katz and Mair (2018):

“…The mainstream parties, and most minor parties as well, have effectively formed a cartel, through which they protect their interests in ways that sap the capacity of their erstwhile principal—the electorate—actually to control the parties that are supposed to be the agents of the electorate. While the appearance of competition is preserved, in terms of political substance it has become spectacle (p.7)…”

By forming tight bonds and backing the rest of the elected officials on the council, each works to consolidate the power within this single unit of governance. Forming an impermeable oligarchy that the voters cannot vote out office due to a lack of policy competition. Analogous to an economic cartel, where consenting producers all fix prices in unison, all politicians “fix policy” to conform to the rest of the representatives on the council. This keeps external influences out of the fold, enabling all to retain their seats if they play ball. Much like all participants in an economic cartel enjoy larger profit margins, if no one reneges.

Hypothetically, let’s say there are four council members; one of the incumbents decides to resign mid-term. The replacement candidate is an insurgent candidate, breaking the unanimity among the colluding council members. This loosens the relational foundation among the incumbents; we start to see instances of defection among them. What was once complete accord among the old boys club quickly devolves into a prisoner’s dilemma. It is important to remember that cartels seldom are sustainable indefinitely. Eventually, the temptation of one party to undercut the rest of the colluding companies will cause them to defect (Tullock, 1985, p. 1076). For example, one particularly narcissistic council member may claim responsibility for policy reforms that his other cohorts co-sponsored. This type of behavior only undercuts the contributions of the others, leading them to undermine this arrogant council member. The cadre of incumbents suffer from the eroded trust. The newer member with innovative policy prescriptions; only proceeds to dimmish the creditability of the old boys club.

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