DP12206 Fundamental Errors in the Voting Booth

Author(s): Edward L Glaeser, Giacomo AM Ponzetto
Publication Date: August 2017
Keyword(s): Fundamental attribution error, political economy
JEL(s): D72, E03
Programme Areas: Public Economics, International Trade and Regional Economics, Macroeconomics and Growth
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=12206

Psychologists have long documented that we over-attribute people's actions to innate characteristics, rather than to luck or circumstances. Similarly, economists have found that both politicians and businessmen are rewarded for luck. In this paper, we introduce this "Fundamental Attribution Error" into two benchmark political economy models. In both models, voter irrationality can improve politicians' behavior, because voters attribute good behavior to fixed attributes that merit reelection. This upside of irrationality is countered by suboptimal leader selection, including electing leaders who emphasize objectives that are beyond their control. The error has particularly adverse consequences for institutional choice, where it generates too little demand for a free press, too much demand for dictatorship, and responding to endemic corruption by electing new supposedly honest leaders, instead of investing in institutional reform.