Political Sophistication and Sovereign Debt Resettlement

K. Amber Curtis, Joe Jupille and David Leblang have a paper on Iceland’s “Icesave” referendums, “the only occasions in history on which ‘the people’ were asked to vote directly on sovereign debt resettlement terms.” On the basis of a survey conducted immediately after the second referendum, they find that voting was in part driven by individual self-interest (although their findings are in places equivocal). Perhaps their most interesting tentative finding is that there is no evidence that levels of political sophistication or political knowledge affect voters’ ability to vote their interests.

We suspect—but cannot confirm—that the null result around the conditioning role of political sophistication on interests may have to do with the nature of the informational environment surrounding the Icesave 2 referendum. Recall that Iceland was considered to face near-existential threat from October 2008 forward and had seen the collapse of a government, a currency, and a banking system. The Icesave issue was front-page news regularly from summer 2009 forward, most especially around both the 2010 and 2011 referendums. … We conjecture that in such a massively saturated informational environment, most citizens were able to make well-informed voting choices, leaving relatively no variation in terms of overall sophistication. In other words, the highly salient and publicized context surrounding this particular event may explain why, according to our data, almost all Icelanders appear highly ‘sophisticated’.

This has implications, if it bears out more generally, for broader debates about political knowledge and the circumstances under which voters can and cannot be expected to vote intelligently to further their particular interests.

7 Responses to Political Sophistication and Sovereign Debt Resettlement

  1. RobC July 31, 2012 at 9:11 am #

    In your closing comment, you speak of “the circumstances under which voters can and cannot be expected to vote intelligently to further their particular interests.” The insertion of the adverb “intelligently” in that sentence raises some fascinating questions. Did a white voter who was a beneficiary of Jim Crow but nevertheless voted to end it fail to vote intelligently? What about a senior citizen who votes to support public projects that won’t be built until after her death? A wealthy person who votes for the candidate who wants to raise his or her taxes? Someone with no children who votes to incur higher taxes to support the public school system? An elderly person who opposes measures that would benefit his cohort at the expense of younger taxpayers? Someone who favors anti-global warming initiatives even though the cost of those will impact her and the benefits won’t be realized for generations?

    In other words, are those who respond to arguments for justice, fairness and the good of society rather than voting to further their particular interests acting unintelligently?

  2. Henry Farrell July 31, 2012 at 10:35 am #

    RobC – the answer to your rather laboured rhetorical question is no. To say that _person x_ intelligently follows their self-interest does not, as a matter of basic logic, entail that those who are not self-interested are ipso facto unintelligent.

    • Daniel July 31, 2012 at 12:46 pm #

      But are they voting intelligently? I think that was RobC’s question.

  3. Amie Kreppel July 31, 2012 at 11:31 am #

    In addition, self interest need not be narrowly defined in an econometric way. If someone derives value from something because “it is the right thing to do” or they view it as morally “better” than the other options then voting in support of those outcomes are also “self interested” and “intelligent” in this context despite whatever economic cost may have accrued – as long as the value derived surpassed the cost of the economic loss incurred. Remember: Mother Theresa was very much a “rational actor” – she worked to have and achieve those things that were of the most value to her. The fact that these things were not dollars makes no difference whatsoever. Puruit of transitive preferences within (known) existing constraints… that is all it takes folks….

  4. RobC July 31, 2012 at 11:37 am #

    Thanks for your reply, Professor Farrell, and I apologize if my comment struck you as rather laboured. I did infer from your sentence that a voter who voted to further his or her particular interests was, by your lights, acting intelligently. (Note that whether someone votes intelligently is different from whether that person is intelligent or unintelligent, though your response elides the two concepts.) If that’s not what you meant, then I reckon you were distinguishing between those who vote intelligently to further their particular interests and those who vote unintelligently to further their particular interests. As I think about it, that latter category does include a lot of voters.

  5. Henry Farrell July 31, 2012 at 12:06 pm #

    RobC – there is controversy in US debates e.g. over whether working class voters who vote Republican do not ‘understand’ their material interests (the Tom Frank argument). As Andrew Gelman has pointed out, Frank is wrong on the empirics (there is still a strong relationship between social class and voting, which points in the expected direction), but there still are some broader questions about how knowledgeable voters are about the economy, what their interests are and so on, with some people, including political scientists, expressing very considerable skepticism about the degree of political knowledge of the modal citizen. This is potentially interesting as a case where people arguably _did_ understand the economic issues extremely well, pointing to circumstances under which that skepticism may be less warranted. The question here is about the interaction effect between economic interest (however measured) and political knowledge, not about whether responsiveness to economic interest and political knowledge are positively correlated.

  6. Sarah August 2, 2012 at 7:54 am #

    Interesting. But, I’m not sure how widely applicable the findings are to voting behavior more generally. The particular referendum in question was solely an economic matter. Representative elections require voters to choose individuals to represent them in a multidimensional issue space. In such context, economic voting is less straight forward since voters also may consider other dimensions such as an egalitarian/traditional dimension.