New Research Shows Evidence of “Vote-trading” in Congress

From FEE.org (June 28, 2023):

A new research paper by Drs. Marco Battaglini, Valerio Leone Sciabolazza, and Eleonora Patacchini with the National Bureau of Economic Research (NBER) seems to suggest there may be some vote-trading going on in Congress with some interesting benefits for participants.

In their 1962 book The Calculus of Consent, economists James Buchanan and Gordon Tullock explore the idea of vote-trading. The idea is simple. If a representative from Kansas really wants an agriculture bill to pass, and a different representative from Ohio wants a manufacturing bill to pass, they can engage in a simple deal—“I’ll vote for your bill if you vote for mine.”

Economists call this process logrolling. Let’s consider an example of why it can be such a problem. Imagine the fictional country of FEELand is split into three districts. Each district has a representative. The representatives want one thing—to be re-elected. And they maximize their chance of being re-elected by giving their constituents the most money taken from those who are not their constituents.

So let’s say there are two bills up for a vote. Bill A provides free agriculture equipment to farmers, and for sake of ease let’s say only District 1 has farmers. The technology provides $120 worth of benefits in total, and it costs $150 which is divided evenly among the three districts.

District #	Benefit	Cost	Vote?
District 1	$120	$50	Yes
District 2	$0	$50	No
District 3	$0	$50	No
Total FEELand	$120	$150	No

Figure 1—Bill A

In this case, District 1’s representative votes yes because the constituents receive $120 and it only costs them $50. On the other hand, the other two districts vote no because it’s $50 of cost with no benefit to their constituents. In this case, Bill A would fail which is a good thing. The benefits are less than the costs! FEE Land is made worse off by Bill A.

But now let’s consider Bill B, a manufacturing subsidy bill. Bill B costs $60 for each district and provides $115 worth of benefit to District 2, and nothing to the other two. The figure for Bill B looks similar.

District #	Benefit	Cost	Vote?
District 1	$0	$60	No
District 2	$115	$60	Yes
District 3	$0	$60	No
Total FEELand	$115	$180	No

Figure 2—Bill B

So District 2 supports Bill B, but the other two districts do not. In this case, Bill B fails.

But now imagine the representatives from Districts 1 and 2 engage in an exchange. They both agree to vote for the other’s favored bill. Look at the results now.

District #	Benefit	Cost	Vote?
District 1	$120	$50+$60=$110	Yes
District 2	$115	$110	Yes
District 3	$0	$110	No
Total FEELand	$235	$330	Yes

Figure 3—Bill A and Bill B Logrolling

With this exchange, District 1 receives $120 in benefits for their agriculture bill, and pays a total of $110. This is a net gain of $10. District 2 has a net gain of $5. But how did these two bills pass if they both have costs higher than the benefits? They passed on the back of taxpayers in District 3 who take on these costs for no benefit.

So this is logrolling. Politicians trade votes with colleagues to get bills passed, and those outside of the exchange hold the bag.

Logrolling With a Twist

So what did the researchers find in their NBER paper? Well it does appear logrolling happens. First they find, “results show legislators are more likely to vote in the same way as their alumni connections when the majority of them choose to take a common stance, that is, voting Yeah, Nay, or abstain.”

In other words, the research did identify groups who appear to vote together on particular bills, and this isn’t merely capturing the effect of party coalitions. The authors point out their results are “statistically significant over and beyond the influence exerted on the legislator by his/her party.”

But that isn’t all. Second, the researchers find a pattern to when these coalitions are strongest. “Evidence shows logrolling is most likely to occur between two connected colleagues when one of them has a vested personal interest in the outcome of the vote, and the other does not.”

Remember, in our example above, the representative of District 2 had very little interest in whether Bill A passed, so long as it didn’t impose a net cost on District 2 constituents. The idea here is you only are willing to trade votes when it isn’t very costly for you to do so. This evidence makes perfect sense in the context of our simple example.

But, lastly, the authors document something odd. Logrolling doesn’t appear to affect legislative outcomes. In other words, unlike our example above, bills don’t live and die by logrolling.

However, vote-trading isn’t valueless for politicians. Despite having no clear relation to legislative success, the authors find vote-trading “has a positive and statistically significant impact on his/her chances of obtaining a promotion.”

So the authors find that politicians who engage in logrolling improve their future career prospects. Why? It’s not exactly clear, though the authors suggest that it’s a sort of loyalty test.

Whatever the reason, the authors provide further evidence that logrolling is a real phenomena in legislatures. This sort of finding acts as a good reminder that an accurate analysis of politics involves looking at politics without romance as James Buchanan rightly suggested. [source]

Makes sense. Just another example of "I'll scratch your back if you'll scratch mine" exchange. Politicians acting normally.