Question

examine the role played by the median voter under a system of majority voting in deciding the level of public goods and redistribution in society?

Answer 1

The Median Voter Theorem states that a majority rule voting system will select the outcome most preferred by the median voter. It is based on 3 assumptions:

1. There will be only one issue that is being voted on at a time.

2. Voters preferences are a spectrum of utility, ie voter have one alternative which he/she will always prefer over any other.

3. voters are only choosing between two options. This is because if voters have more than 2 choices a median voter may not have voted for the popular option.

Role Played by the median voter- Example

A good is called public good when it is non-excludable and non- rivalrous ie. no one can be excluded from its usage nor when is used by any individual its quantity will decrease. For example fresh air, street lighting, defense services.

Let us take the example of defense services. It is the election time and the government wants to increase its spending on defense services by 25% but the opposition wants a 25% decrease in spending on defense expenditure so as to focus on farmers welfare and providing subsidies and benefits to them. While the median voters are indifferent and want expenditure on defense services to be the same. To capture voters the government decided to increase expenditure by only 5% and rest spending on farmers welfare. To gain electoral advantage rival party counters by reducing expenditure by 5% only. This cycle will continue until both the parties arrive at the outcome preferred by the median voter.

This way median voters affect the decision and distribution of public goods.