Political Partisanship Bad For The Economy

The High Cost of Bankrupt Politics

The business base withers, economies falter, and society suffers when partisan passion replaces policy.

What is the driving force in local politics today? Gathering the like-minded in one place and getting rid of dissenting voices through gerrymandered districts. Just ask Tom Delay. The House Majority leader was the power that sliced and diced the Texas political map that solidified Republican control and isolated minority voters into a few districts. The economics of the Curley Effect suggest that when political leaders craft policies that reinforce orthodoxy -- whether in a Republican or a Democratic stronghold -- local economies end up eviscerated. As a result, state and local governments are finding it harder and harder to reach the kinds of compromises that fund public goods like education.

"Curley Effect" That's the term devised by Harvard economists Edward L. Glaeser and Andrei Shleifer for the incentive of political entrepreneurs to increase their power base through policies that reduce wealth. The Curley Effect is named after the legendary Boston Mayor James Michael Curley. Glaeser and Shliefer argue that Curley's politics -- aimed at getting rid of the competition and ensuring him reelection -- carried a steep economic price tag.

SF Writer David Brin has a highly interesting poll on the subject of partisanship and idealogy and propaganda. "I am a member of a civilization."