Economics of the Party

18 06 2009

It would be challenging to say the least to make any sort of meaningful distinction between a political party and a private corporation. Strictly speaking, the party is an organization which hires professionals (politicians) in order to supply a service (governance) to its external customers (voters) in exchange for some sort of payment (power). Even though after the elections, if successful, that same party will be in the convenient and lucrative position of a licensed monopoly, before election it has to compete vigorously for market share with no less motivated and able competitors.

The bottom line is that all it matters to our party is how many customers have chosen its product. In order to advertise this said product the party needs to take into account the interactions with other competitors and position itself strategically in the market with the help of vigorous marketing in the form of nirvana-type of election promises and preferably vague and unspecified ways of achieving them. Looking shortly through the marketing campaigns of the Bulgarian parties for this coming election, one is obliged to notice one sad thing: they are offering the same product in terms of political agenda!

Obviously this is based on the theory of the median voter, establishing that the party with promises closest to the ideas of the median voter will have largest support. This effect supposedly tempers political ideas and produces a clearly more consensual government. But has a potentially lethal side effect: it produces practically identical political programs of the major parties. This is a self-defeating strategy. Let us refer to Michael Porter’s ideas of the successful companies: they either win in the price segment or the quality segment. Those stuck in the middle are, however, the biggest losers. And now the paradox: all major Bulgarian parties are, in fact, stuck in the middle!

The ideas of true left policies or true right policies have dissipated in thin air, and as it happens, “We are all capitalists now, comrade!” The lack of meaningful political differentiation leads to excessive spread of votes, as the median voter practically identifies with all parties on an ideological level. Consequences are as follows:

>> Parties do not compete on ideas any more, but on trifle practicalities and politics turns into a mainstream exercise devoid of its reforming vigor
>> Persons and reputation gain excessive importance and consequently more tolerance, thus exacerbating the principal-agent problem
>> A lot of voters (customers) do not feel represented by any party (product) and therefore do not vote (buy)

All in all, the standardization of political ideas into a mainstream of programs leads to a clear failure of the political market, and the establishment of a dangerous monopoly. And, as in every monopoly, the prices of government will likely increase, and quality – sharply decrease to the detriment of all of us. Maybe some rethinking of our political consumption habits is in order here?

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3 responses

23 06 2009
Eli

There is no differentiation between parties because they all copied their programs from the Blue Coalition. 😉
Seriously though, I think that people are unwilling to make the effort to read programs or to think about ideas. They’d rather vote for someone who appears to be honest and capable of fighting corruption and beating up the “bad guys”. I’d say that honesty is really the most important thing, but how do you know who is honest if you don’t listen to what they say, and if you don’t think whether they will do what they promise or not?

26 06 2009
Mary

Go, go, Eli!

1 07 2009
Eli

Where? 🙂

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