Monthly Archives: February 2015

Albrechtsen misses part of the story on the difficulties of reform

In a recent article in the Australian ($),*  columnist Janet Albrechtsen claims the primary reason the current federal government is having trouble getting it’s economic reforms through Parliament is that people are not willing to make the needed sacrifices required to balance the budget and make government spending sustainable.

Although I don’t disagree with everything in her article, I think this is being a little harsh on the Australian people.

Bernard Keane had a much more balanced piece on the difficulty government’s face implementing a reform agenda in Crikey.  He made the very good point that one factor that can make reforms difficult to pass is the perception of fairness. Will this reform help the majority of the population, or will most be forced to pay for the benefit of a few?

And this is one of the main problems the federal government faces in having its reform agenda passed. It is viewed as unfair by many, and an objective analysis of the outcomes of the (largely unpassed) 2014-15 federal budget indicate its impact would fall hardest or low and middle income households (hard to sell that as fair).**

At a time when inequality of wealth, income and opportunities is increasingly a public concern, a government budget that gives all appearances of increasing these inequalities was going to be a difficult sell, even if it also provided greater budget sustainability.

I didn’t see any of this mentioned in Albrechtsen’s piece. It would have been far more well-rounded if it had discussed the difficulties of getting hard reforms through parliament (and elections), balanced with the need for those reforms to be balanced and of benefit to the majority of the population.

* Although paywalled, if you google ‘We, the people, are the threat to fiscal reform’ you may be able to access it.

** Phillips, B. 2014. National and Regional Analysis of the 2014-15 Federal Budget. NATSEM, University of Canberra.

^ An earlier version of this post listed the last federal budget as the 2015-16 Budget. This was incorrect and has been amended.

The only way to save the democracy is to destroy it

Or so says this guy in the Herald Sun…

Now I don’t know who he is or what his deal in, but  (big surprise) I disagree.

The problem? For starters, who decides what a good outcome is? It could be economic growth, it could be environmental protection, or greater income equality, or more opportunities for the disadvantaged, or it could be more substantial rewards for personal effort.

These are all reasonable debates. Disagreements our democracy allows, and that are be worked out right now through our state and federal parliaments. The committee whatshisname is suggesting would stifle that debate and attempt (unsuccessfully I believe) to find some kind of pseudo-objective consensus where none exists.

Would the committee (lets call it the Committee of Public Safety,* for arguments sake) be rewarded for building a new freeway, or punished for not reducing car dependency and increasing public transport patronage?

Would our Comité de salut public (I’ve made it French for extra flair**), which increases the use of renewable energy, be lauded, or punished, if this meant slightly higher power prices? And if they are to be given incentives for good decisions (how we objectively decide these good decisions, I do not know) who decides how they get the incentives? And how do we ensure these incentives encourage better decision making of currently Parliamentarians?

Now, I know I’m banging on about the same issue about (two of the last seven posts have been on some derivation of this issue). However, one upside is it gives me a chance to make some sweet graphs. For instance, the figure below shows voters attitudes towards immigration (as measured in the Australian Election Study) conditional on their occupation.

Why might we care about this? Because how people view policy outcomes (for instance, whether more immigration is good or bad) will depend on their life experience. As we can see below, voters with professional and managerial occupations are more likely to have positive views on immigration. From 1990 to 2010, 20% of professionals  and 15% of managers said the number of migrant arrivals had not gone far enough, compared with 11% of voters in general, 10% of those without employment and 8% of those in manual occupations. Conversely, 34% of professionals and 41% of managers said immigration to Australia had gone too far over this period, compared with 49% of the electorate in general, 54% of those without employment and 62% of those in manual occupations.

 

The relationship between attitudes towards immigration and occupation, 1990-2010. Each plot shows the proportion of survey respondents in six occupational categories who responded to the question “The statements below indicate some of the changes that have been happening in Australia over the years. For each one, please say whether you think the change has gone too far, not gone far enough, or is it about right? The number of migrants allowed into Australia at the present time”.

The relationship between attitudes towards immigration and occupation, 1990-2010. Each plot shows the proportion of survey respondents in six occupational categories who responded to the question “The statements below indicate some of the changes that have been happening in Australia over the years. For each one, please say whether you think the change has gone too far, not gone far enough, or is it about right? The number of migrants allowed into Australia at the present time”.

 

Why might this be? There is some evidence the benefits of immigration may flow disproportionately to the owners of capital and higher income households. This potential distribution of the benefits of immigration reveals itself in public opinion, with voters in professional and managerial occupations (generally higher income jobs) tending to hold more positive attitudes towards immigration.

A technocrat could look at the objective evidence, but on many policy issues we deal with in politics – from immigration to redistribution to something else – the data is open to interpretation and objectivity is thin on the ground. So while immigration may boost GDP growth, for instance, that boost in growth may mostly accrue to the immigrants themselves, and certain segments of the population, and have more limited benefits for other groups. The research is not conclusive on that, but that’s the whole point: you’re not necessarily going to find some sweet spot in the middle everyone agrees on. That’s why we have politics and parliament and elections; so the contentious issues that divide us can be thrashed out. We might not all like the outcomes of this contest all the time, but it’s better than someone deciding outcomes without the accountability that comes with elections.

*Prize for the person who gets the reference.

** A second hint. Come on, it’s easy.

The idea contentious political issues can be solved with common sense…

… ignores the reality of politics.

Last week, current Reserve Bank board member and former Australian Industry Group CEO Heather Ridout announced ($) she would like to form a ‘Normal People’s Party’.

I’m not entirely sure what a normal person is, but Ms Ridout claimed her party would be able to support such a person. She provided some clues as to what this would mean: the party would advocate for commonsense across a range of policy areas, it would attempt to take a centrist position and it would not be run for the benfits of vested interests.

Now this all sounds laudable, but misses the whole point of democratic politics.

As I discussed the other week, the idea that there us a sensible common sense solution to policy problems, or that we can somehow get everyone to agree on important issues, completely misunderstands why we have a democratic system.

Values can never be taken out of politics, and politics can never be taken out of policy. What we believe makes good policy is ultimately defined by our politics. Who decides what a good outcome is? It could be economic growth, it could be environmental protection, it could be greater income equality, it could be greater opportunities for the disadvantaged, or it could be greater reads for effort.

These are all reasonable goals to emphasise. If you talk to 20 people, though, you will find at least one in that group that will pick one of those, or several other options, making consensus difficult. Luckily, our democracy allows for these kinds of disagreements, which are worked out through our state and federal parliaments.

For instance, looking at how Australian voters respond if they are asked whether the government should cut taxes of increase spending on social services, you get a range of opinions. For instance, in 2010 approximately 36% thought there should be more spending on social services, whilst an almost exactly equal number, 37%, thought taxes should be cut instead. Not only do voters hold a range of opinions at any one time, these graphs also show that opinions change significantly over time (no doubt due to the actions of governments and other external effects). This shows how difficult it can be to find a ‘common sense’ solution to policy problems: quite often people will see entirely different outcomes as being ‘common sense’ answer to the question.

 

Attitudes towards taxes social service spending by occupation. Each plot shows the proportion of survey respondents who gave as their response to the question “Do If the government had a choice between reducing taxes or spending more on social services, which do you think it should do, reduce tax, spend more on social services, or it depends?”

Attitudes towards taxes social service spending by occupation. Each plot shows the proportion of survey respondents who gave as their response to the question “Do If the government had a choice between reducing taxes or spending more on social services, which do you think it should do, reduce tax, spend more on social services, or it depends?” Responses were divided by occupation. Data were taken from the Australian National Political Attitudes Survey (ANPAS) and Australian Election Study (AES).

 

The view of Heather Ridout and others like her may be shaped by their exposure to a limited socioeconomic slice of Australia’s population. I suspect that exectuves like Ms Ridout, as well as many journalists (particularly business writers), and many politicians and other business people, probably tend to mix with a similar group of people: high income, well educated managerial types. Among this group they may meet many like-minded individuals who tend to have similar ‘common sense’ views. Unfortunately, the world is more complex than this.

Whilst among the general public only 37%, thought taxes should be cut in 2010, among managers it was as high as 50% whilst among those without a job it was 32%.

Looking at the alternative, 36% of the electorate and 41% of which without jobs thought social spending should increase. In comparison, only 24% of managers agreed.

 

The relationship between attitudes towards taxation and spending on social services, and major-party voting.

The relationship between attitudes towards taxation and spending on social services, and major-party voting, 1967-2010. Each plot shows the proportion of survey respondents who provided their first preference vote for the Coalition rather than the Labor Party conditional on their response to the question “If the government had a choice between reducing taxes or spending more on social services, which do you think it should do, reduce tax, spend more on social services, or it depends?” Data were taken from the ANPAS and AES surveys.

 

There are many different views on what makes good public policy. Our life experiences, our level of education and our material well-being all shape what we think politically. As the second graph shows, these views are related to how we vote. The idea of a ‘Normal People’s Party’ ignores this simple fact.

Why legislative gridlock may be better than, well… actually legislating

A post I started several months ago and never finished. Apologies for the late posting, but it’s still probably worth while.

There’s an interesting post at the Washington Post’s Monkey Cage blog, by Stanford University’s Morris Fiorina. The article makes the argument it may be better if it is difficult for government and legislators to implement their agenda. I think it’s a timely read for Australians, with a few commentators and business interests lashing out at gridlock lately. The argument is often that the government should be able to push a “reform” agenda* through parliament no matter the opposition is unfortunately alive and well in Australia. See here and here for a few examples (maybe not the best ones, but the best I could come up with in a few minutes).

Since the Australian example include successive Australian governments deciding it is a good idea to pay people to buy homes, have children, give them even more money to have children (especially if they’re wealthy) and sending them vouchers for counselling when they  get married (okay, the last two haven’t happened, yet – but would have if government had its way) it may not be a bad thing if their planned legislation is required to go through a little gridlock to stress test it. That being said, there is likely an optimum level of gridlock, where legislation is difficult enough to pass that it weeds out some of the weaker initiatives and improves the rest, but not so gridlocked that very little is passed at all.

 

*with reform often used to mean any policies the proponent believes are good.

The Liberal Party a broad church? Maybe not.

Last Friday, in an article in the Australian Financial Review, journalist Andrew Clark described the centre-right Liberal Party as a broad church. He is not the first to do so. Former Liberal Prime Minister John Howard used the phrase many times to describe the party he led,*and a number of commentators have also used it (for instance, here and here) and other politicians (such as current Attorney-General George Brandis in his 2009 Alfred Deakin Lecture**).

However, looking at the issue preferences of the Coalition’s candidates compared to those of the Labor Party indicates there’s not a lot of evidence for the claim.

Using an item response theory model (the same type of model described here) fit to surveys conducted on federal election candidates in eight of the nine elections held between 1987 and 2010, we can examine the issue preferences of Coalition and Labor candidates.

cltn.cand.dist.print2

labor.cand.dist.print2

Each plot shows the distribution of economic (horizontal axis) and social (vertical axis) issue preferences of both parties’ candidates in each of the eight surveys.  Each point represents a seperate surveyed candidate. Issue preferences are measured on a left-right spectrum standardised to have a mean of 0 and variance of 1. The higher the scored preference, the further to the right the candidate is (so a candidate with a score of +1 is 1 standard deviation to the right of centre).

Examining these plots, we can see that Coalition candidates are overwhelming located to the right of centre on both social and economic issues. Labor candidates are also generally to the left of centre, but their preferences are no less distributed than the Coalition candidates on economic issues and far more diverse on social issues. This suggests the Labor Party attracts candidates with a wider variety of views on social issues than the Coalition, and similarly constrained views on economic issues.

To be more specific, in the surveys in which Coalition preferences diverged the most on economic issues (2004) and the least (1987), the variance of their preferences were .78 and .49 respectively  (with the electorate as a whole having a variance of 1), compared to Labor’s highs and lows of .71 and .5 each. On social issues the difference is even larger, with the higher and low variance for the Coalition being .63 (1987) and .5 (2001) compared with .73 (1993) and .59 (2010) for Labor.

That is, the Coalition is no more the home of representatives with a diverse range of views than is the Labor Party (at least according to these data). In fact, it appears to be a more constrained ideological movement than its opponents. The Liberal Party a broad church? Maybe not.

*Without a hint of self-interest, I am sure.

** I was going to link to this, as it was previously hosted by The Australia, but for some reason they’ve pulled it in the last few months.

Measuring Australian voters’ ideology over 44 years

What do we want to do if we wish to measure voters’ ideology (or issue preferences, for those who don’t like that word)?

Unfortunately, here in Australia the we don’t really have survey data available which asks a large number of consistent questions over time, which would allow us to compare voters of, say, the 1960s, with the voters of today.

Additionally, there’s also the question of how useful is survey data for measuring voter attitudes? Based on his analysis of survey repsonses, Philip Converse didn’t think most voters’ had a comprehensive ideological framework within which they organised their political preferences; although later research has indicated he might have been a little harsh, with measurement error obscuring the real political preferences of the voters he was examining.

One way of dealing with the lack of consistent questions over time and issues of measurement error, is to model the latent ideological traits using graded Item Response Theory (IRT) models.

Although much of the original work on IRT estimation was conducted by education scholars to measure latent traits such as intelligence or personality, more recently these methods have been developed to measure the latent ideological attitudes of political actors, such as justices of the United States Supreme Court (Bafumi et al. 2005) and voters (Treier and Jackman 2002, Treier and Hillygus 2009). The model I look at here was fit to 34 issue items from a combined file of all 12 Australian National Political Attitudes Survey (ANPAS( and Australia Election Study AES) surveys using the mirt package (Chalmers 2012) in R (R Core Team 2013). These surveys provide information on the policy preferences, voting behaviour and demographic backgrounds of 24,393 respondents sampled from 1967 to 2010.

I measure the latent issue preferences of voters on a left-right spectrum (standardised to have a mean of 0 and variance of 1) and two dimensions (effectively an economic and social issue dimension), with the results for the economic dimension shown below.

 

The first preference vote choice of ANPAS and AES survey respondents and their economic issue preferences, 1967-2010. Each party is measured by the difference between the issue preference of their median voter, and the electorate’s median voter.

 

Each plot shows the economic issue preferences of the median voter of  five of the more significant parties to contest Australian federal elections over the 44 years from 1967-2010, compared to the actual median voter for each survey. The higher scored preference, the further to the right each party’s median voter is. I’ve plotted a linear trend line for each party to make patterns clear.

The results are not particularly surprising. Greens and Labor voters are left of centre. Coalition voters are right of centre, with One Nation slightly more centrist on economic issues. What is interesting is that the Democrats start at the centre (not surprising) and then shift well to the left over a 20 year period. Also interesting, the median Coalition and Labor voter has moved to the right compared to the electorate median over this time (likely as both lost their more leftwing voters to the Democrats and then Greens).

 

 

 

One story. Two interpretations.

It always amazes me how two people can see the same event, but have completely different interpretations.

This brings me to today’s observation: coverage of the Liberal Party leadership. According to The Age, speculation over the leadership is “at fever pitch”. However, according to The Australian,* “public momentum for a leadership challenge to Tony ­Abbott is losing pace”.

The same story. Two very different interpretations.

 

 

*paywalled, but just Google Danger for Tony Abbott remains but momentum for change waning