With Howard going green, and Labor offering tax cuts, commentators like Peter Hartcher are now asking why the major parties’ policies seem to be converging. To an economist, this is a somewhat odd question. The median voter theorem characterises the two parties as self-interested bodies, who will always find themselves fighting over the same voters – those in the middle of the distribution. In a case where there is only one fundamental issue in the campaign, the parties will end up offering precisely the same policies. There are some good criticisms to be made of the median voter theorem (one is that in the Australian context, we’re really talking about the median voter in the median marginal seat) but it’s not a bad starting point.
I know of no solid evidence that the parties have really converged. But let’s assume for a moment that they have. What might explain this?
One factor is the decline of interest groups. Strong internal forces can pull a party away from the median. For example, the unions pulled British Labour spectacularly to the left in the 1983 election (outspoken MP Gerald Kaufman described their manifesto as “the longest suicide note in history”). Today, the Republican Party is moving strongly to the right (we know this from work by Poole and Rosenthal), but manages to stay in office thanks to big donors that allow it to sell the message to the public that it’s really a party of the centre. With rapidly falling unionisation rates, the ALP may well have lost one factor which traditionally pulled it away from the median (can people who know more about the Coalition posit any similar factors for them?). If you don’t like thinking of parties as merely governed by their interest groups, another way to phrase this is that parties might have a weaker ideological commitment today than they did in the past.
A second possible factor is race. A classic case in which the median voter theorem breaks down is where there are two cross-cutting issues – eg. race and class. In the single issue case, one party has all the poor voters, the other has all the rich voters, and they fight over the middle-income voters. In the two-issue case, a party can win with a set of policies that helps the rich and racist, or the poor and non-racist. Despite the attention devoted to the refugee debate, it’s possible that race has actually declined as a first-order issue in Australian elections, at least compared with the days when Opposition Leader John Howard was making noises about reducing immigration from Asia.