Does money buy power?

Dani Rodrik has interesting stuff to say about the way policy is formed. He discusses whether government policy is driven more by the prevailing ideology or by the interests of powerful lobby groups. There are two key ponts he makes:

  1. There are a lot of ways to make the lobbyists happy and many of them also help others, or fit in with the government’s ideology. Therefore it’s often hard to infer the motive from the action. I would add that the inference is often made on the basis of the observer’s personal political views.
  2. So far as he can tell, ideology is usually more important than lobbyists:

    isn’t it the case that the reason trade unions, say, have lost power in recent decades is the ideology of deregulation which swept Washington, D.C.? Or that U.S. auto makers have been unable to get large-scale import protection because this was a no-no in the prevailing ideological climate?… The fact that the U.S. wants fiscal stimulus and Germany doesn’t cannot be explained by the relative power of different groups within those countries. It has much more to do with the way in which their respective governments have defined the problem and the “lessons” of history they have drawn. Similarly, France wants more global regulation in large part because, well, France believes in regulation. Sure, Britain and the U.S. prefer a lighter touch in part because their financial sectors are more powerful–which in turn is due in part to the Reagan-Thatcher ideological revolution.

If we accept Rodrik’s argument then we must ask where these ideologies come from. In a democratic system there is no avoiding the fact that the prevailing views of the government are usually the ones voted for by a plurality of the citizenry. I’d like to think that this is the case because it would disturb me to believe that money can buy power that a democratic majority cannot achieve.

14 replies
  1. Paul Walker
    Paul Walker says:

    I would ask, How many votes are there in ideology and how many are there in keeping lobby groups happy? Lobby groups would win every time. Every now and then you will get “ideological revolutions”, eg Reagan and Thatcher, but most of the time its lobby groups who rule.

  2. moz
    moz says:

    It’s not one or the other, it can be both and there are definitely other factors. Counter argument: populism never goes out of fashion.

    Ideology IMO is more likely to drive the advisors rather than directly the politicians. Most blatantly treasury who are notorious in NZ for their briefings to ministers. Once a situation is framed as a conflict between what the government/voters want and can be done with the money available the problem is mostly solved.

    One view of what’s happening with climate change is that it’s become a purely ideological battle. The question being debated is not “what should we do” but “how much can we get away with”, so we’re now somewhere between ideology and populism. This is visible inside the ALP in Australia as the browns fight against “what we should do” in favour of “what we’ve always done” (to be charitable about it) while the few remaining greens dance frantically to avoid being called names. I find that very, very frustrating. Faced with a choice between 50% and 80%, Rudd came up with 5%. You’d think he didn’t understand the question.

  3. Steve Withers
    Steve Withers says:

    I’ve seen enough elections over 40 years in a variety of countries to cause me to come to the provisional conclusion that a huge chunk over voters on all sides have very close to no idea what they are voting for. The election last year in NZ was a classic example of getting “Low information voters” (LIVs) to vote on “wedge” issues (stuff that isn’t actually relevant to them personally in any way, but which evokes an emotional response).

    The entire strategy requires deep cynicism and loads of cash. Despite the EFA, having both newpsaper chains on their side was a huge boon to National. The NZ Herald’s two sections devoted to John Key on subsequent Saturdays was a priceless donations of resources to their preferred party.

    The left usually can’t afford it and its supporters too idealistic to find enough cynical people to make it happen and get away with it.

    So the “prevailing ideology” is the one the folks with cash have distracted voters into endorsing without really knowing what it is.

    The Reagan / Thatcher revolutions were ultimately rejected when voters finally worked out what they really were couldn’t be tricked any more.

    But the problem is, new suckers are born every day and the lessons don’t stick….especially now when the dumbing down process is far advanced and so few actually think…..never mind think for themselves.

    harsh words, perhaps, but when was the last time you tried to talk about any issue in detail with someone at a bus stop? Almost everyone knows next to noting about almost everything.

    It’s scary.

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