An Analysis of Economic Efficiency in Predicting Legislative Voting Beyond a Traditional Liberal-Conservative Spectrum

Abstract

Self-interest and ideology are important explanatory variables for human behavior and are the two primary determinants of legislative decision-making. Self-interest usually pertains to a maximization of financial resources and is closely related to the concept of rationality. Utility maximization is a component of self-interest and individuals cannot be expected to pursue public interests unless the individual’s self-interest is met. Ideology reflects deep beliefs about a person and how individual satisfaction derives from improving the lives of others or promoting ideological positions. Ideology is defined as an action oriented model of people and society. Political ideologies depict the preferred states of the world and are often illustrated through a liberal-conservative spectrum. Liberal positions generally espouse more government intervention and equitable resource distribution. Conservative positions, on the other hand, are less likely to embrace the need for government policies and are more concerned about costs associated with such intervention. Measuring legislative decision-making through a liberal-conservative spectrum includes characteristics of a legislator’s behavior but does not include results of those actions. Through development of an economic efficiency index (E-score) that assigns numerical values to legislative voting, public benefits of a public policy decision are measured vis-à-vis public costs. Higher E-scores are consistent with legislative behavior promoting greater net public policy benefits, while lower E-scores are associated with relatively lower net public policy benefits. The model utilizes two dependent variables: support for increasing the federal minimum wage (an economically inefficient policy) and support for medical malpractice reform (an economically efficient policy). Roll call votes of members of the U.S. House of Representatives and U.S. Senate are analyzed from the 99th through 108th Congresses. A multivariate analysis of the model finds that liberal-conservative ideology is a better predictor of legislative behavior than economic efficiency. This study finds that the potential use of economic efficiency is numerous in public policy dialogue and analysis for supplementing liberal-conservative measures with objective criterion for understanding behavior. Application of an E-score transcends legislative voting at the federal level to include state and local government analysis of public policy solutions to private sector needs.