Politics & Policy

The Economics of Political Competition

High walls to entry should be torn down.

Markets rely on competition to function properly, and few would argue that economic competition is bad policy. Yet this market fundamental is applied all too infrequently to politics where restrictive ballot-access laws limit political competition by erecting high walls to entry. Politicians who benefit from these walls rarely question them. They should be torn down.

Economics textbooks classify a market in four ways: monopoly, oligopoly, monopolistic competition, and pure competition. These can also be applied to politics. Any system that features only one party (monopoly) or an identical product (pure competition) is likely to be rejected by a majority of consumer voters. The ideal is somewhere between “fewness” (oligopoly) and “differentiated products” (monopolistic competition). Yet high barriers to entry prevent this ideal in many states.

New York and California are examples of this ideal. Both states feature lower barriers to political entry, creating political markets with a greater variety of choices. Some “consumers” in these political markets have responded with their votes.

Consider vote totals for the U.S. House of Representatives. In multi-candidate races in 8 of 21 election cycles dating to its founding in the early 1960s, the New York Conservative party received at least 5 percent of the vote, considered the minimum threshold for major-party status. The California Libertarian party, since its founding, has surpassed the 5 percent threshold in more than half the state’s House districts. The anti-tax libertarians received more than 1 million votes nationwide in 2004 — for the third consecutive cycle — largely as a result of lower barriers to political competition in states like California.

It may happen only rarely, but voters in these low-barrier states have indeed elected alternative candidates to office. For instance, the N.Y. Conservative party’s James Buckley was elected to the U.S. Senate in 1970. States with higher barriers only restrict such worthy competition.

One example of a high-barrier state is Ohio. Alternative presidential candidates in this state who seek ballot status using their party affiliation — versus generic “other party” status — must gather more than seven times the number of petition signatures. Ralph Nader did not achieve ballot status in Ohio in 2004. (An excellent source on this topic is Ballot Access News, edited by attorney Richard Winger.)

States and politicians unwilling to consider the merits of competition may wish to review another economic concept: self-interest. This is especially true for Republicans. The total Green party vote in House races has increased from 40,177 to nearly 400,000 since Republicans took control of the chamber in 1994. Ralph Nader, the 2000 Green presidential candidate, has argued that Green voters consider Democrats to be ineffective in challenging the GOP. Another possibility is that the Greens are attracting new voters. Whatever the explanation, some Democrats don’t like it, and spent considerable resources this year to remove Nader from ballots.

That doesn’t mean they can restrict competition in states with lower walls. The Greens are fielding more candidates (5 in 1994, 51 in 2004) and have held the “balance of power” in close races won by Republicans — such as those won by Rep. Mike Rogers (Michigan) and Rep. Heather Wilson (New Mexico).

A cursory glance at 2002 state election results reveals that many Greens are holding the balance of power in races won by Republicans. In Maine, these were state house districts 3 (Sarah O. Lewin), 82 (Earle L. McCormick), and 128 (Eugene L. Churchill), and state senate district 11 (Carol Weston). Green Independent John Eder serves in the Maine house. Republican treasurer Jack Voight was elected in a close race in Wisconsin, with Green Paul Aschenbrenner winning nearly 7 percent of the vote. Minnesota Republican secretary of state Mary Kiffmeyer and auditor Patricia Anderson Awada also won narrow races that featured Greens. In Michigan house district 51, Republican Dave Robertson won by 506 votes in a race where Green Peter Ponzetti III polled 549 votes.

States and politicians that erect high barriers often argue that voters do not want more competition. This self-serving argument ignores consumers. One legislator who understands this is Michigan state Rep. Leon Drolet, (R., Macomb County). Drolet used economic analogies to convince his colleagues that lower barriers expand political choice and competition.

Consumer voters in states with high barriers to competition would benefit if more of these walls were torn down.

Greg Kaza is an economist and writer based in Little Rock.

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