Submission GRUBEL-0791 (Online)

 

The Case against Proportional Representation


More than 600 submissions to the Citizens' Assembly on Electoral Reform in British Columbia have been published on the Internet. Most criticize the present plurality system on the grounds that it is undemocratic and encourages voter apathy because elected politicians do not listen to minority views. Most submissions recommend the adoption of the mixed proportional representation system now existing in Germany and New Zealand.

The debate over proportional representation has become relevant beyond the border of British Columbia since after the federal election on June 28, 2004, the national NDP has made it be known that in return for support of the minority government, it demands the adoption of such as system for federal elections.

The criticism of the plurality system in the submissions is patently false. As a Member of the Federal Parliament I spent much time listening to the concerns of my constituents, be it in private meetings, political gatherings, parliamentary committee hearings or through emails, letters and phone-calls. These concerns were discussed during the design of party platforms, in party caucuses and on the floor of the House of Commons. However, after due consideration of minority concerns, almost none were acted upon.

All of the proposals for more government benefits, spending, taxation and regulation have merit. I have always listened to their advocates carefully and often have been deeply moved by stories about the needs of many citizens and impressed by the compassion and sincerity of the advocates. But the fact is that need and compassion are not enough. Society has only limited resources and politicians have to make choices on how they are used.

Canadians want to keep most of their earnings for private consumption so that the overall level of taxation is strictly limited. The tax revenues have to be allocated to many competing causes that serve all Canadians like healthcare, education, social insurance programs, defence, infrastructure, policing and the criminal justice system. In addition, as much as a quarter of all revenues have in recent years been used in making unavoidable payments on government debt. Politicians, however much they may share the compassion and views of advocates for more spending, once in government have to come to terms with this economic reality.

The main problem with demands for more regulation in support of good causes is that regulations impose costs of compliance and reduced freedoms on all Canadians. The more regulations there are, the slower is economic growth and the smaller is the future ability of the government to tax and spend on good causes. Politicians reject the demand for new regulations because their additional costs exceed the benefits to society.

For a long time it was considered conventional wisdom that the democratic process operating in Canada under the plurality voting system results in spending, taxation and regulations that serve the best interest of society. In recent decades political scientists and economists have challenged this view, suggesting that there may be too much spending and regulation. The reason is that these programs tend to be in the interest of politicians for whom is assures electoral success, not in the interest of society. Interest groups whose demands are satisfied by the politicians deliver votes and financial support while the rest of the population is ignorant of the costs of meeting these demands or cannot be bothered to oppose them.

The main reason to oppose the adoption of the proportional voting system or any of its variants is that it creates a bias for increased spending and government regulations greater than the optimum or even than the levels reached as a result of the political payoffs to interest groups. The main reasons for this outcome are obvious from historical and international evidence. Under proportional voting systems countries often get 'pizza parliaments', so called because a seating map of the legislature resembles a pizza cut into many pieces.

In pizza parliaments even the biggest parties rarely have enough seats to form a government and they are forced into alliances with smaller parties. Such governments tend to be unstable. Most important, they give great leverage to small parties that demand legislation and regulation for the benefits of their members in return for voting with the government. An empirical study published recently in the prestigious American Economic Review lends strong support for this view. Countries with proportional representation have higher spending and levels of regulation than parliaments elected under the plurality system.

The switch from the present to the proportional system has the strong support of the NDP and Greens and of the former Reform Party. Canadians should oppose such a switch because the resultant higher government spending and regulations reduce incentives to work, invest and take risks and thus slower economic growth. Future levels of consumption and the government's ability to finance existing spending programs would be endangered correspondingly.

Canadians who are impressed by the arguments for proportional voting systems should remember that its advocates are not giving us the whole picture. Like ideologues of all stripes, they criticize the existing system without considering its benefits. At the same time they present a utopian view of their preferred alternative without considering its shortcomings. Canadians should not let themselves be misled by this technique.

Herbert Grubel, Professor of Economics Emeritus, Simon Fraser University; Senior Fellow, The Fraser Institute; Reform MP for Capilano-Howe Sound, 1993-97