The median voter theorem states that under certain assumptions, the outcome of the decision is the outcome most preferred by the median voter.[1] The assumptions include a majoritarian election system in which political views are along a one-dimensional spectrum.
The median voter theorem predicts that with majoritarian elections, the views of the elected officials reflect the view of the median voter, as those on one side of the median voter comprise a majority.
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As with every economic model, the median voter theorem makes several assumptions. First, the theorem assumes voters can place all election alternatives along a one-dimensional continuum.[2] It seems plausible that voters can do this if they are voting for a single policy or if they can clearly place political candidates on a left to right continuum. However, problems arise if there are multiple policies being considered on the referendum, thus making the continuum two-dimensional. Second, the theorem assumes that voter’s preferences are single-peaked, which means that voters choose alternatives closest to their most preferred outcome. This assumption predicts that the further away the outcome is from the voter’s most preferred outcome, the less likely the voter is to select that alternative.[3] Third, the median voter theorem assumes that voters always vote for their true preferences. It is clear from the research that voters do not always do this (McKelvey 1976).
Interestingly, the median voter theorem seems to explain a few of the phenomena that occur in majoritarian voting systems. First, it may explain why politicians tend to adopt similar platforms and campaign rhetoric. In order to win the majority vote, politicians must tailor their platforms to the median voter.[2] For example, in the United States, the Democratic and Republican candidates typically move their campaign platforms towards the middle during general elections campaigns. Just as sellers in the private market try to win over their competitor’s customers by making slight changes to better their products, so, too, do politicians deviate only slightly from their opponent’s platform so as to gain votes.[2]
Second, the median voter theorem may explain why radical candidates or parties rarely get elected. If a politician is, for example, an extreme liberal on the very left end of the political spectrum, they will not capture nearly as many votes as the politician whose campaign platforms are more moderate. Finally, the theorem may explain why two major political parties tend to emerge in majoritarian voting systems (Duverger's law). Indeed, in the United States there are countless political parties, but only two major parties play a part in almost every major election: the Democratic and Republican parties. According to the median voter theorem third parties will rarely, if ever, win elections because of the same reason why extreme candidates do not tend to win. The major parties tend to co-opt the platforms of the minor parties in order to secure more votes.[1]</ref>
In his 1929 paper entitled “Stability in Competition,” Harold Hotelling suggested that political candidates’ platforms seem to converge during majoritarian elections.[2] Hotelling compared political elections to businesses in the private sector. He postulated that just as there is not a striking difference between salesmen's products, so, too, there is not a stark contrast between politicians' platforms. This is because politicians, just like salesmen with consumers, seek to capture the majority of voters. Duncan Black, in his 1948 paper titled “On the Rationale of Group Decision-making,” a work on majority voting, made the theorem and its assumptions explicit.[4] Black wrote that he saw a large gap in economic theory concerning how voting determines the outcome of decisions, including political decisions. Black’s paper thus began the long line of research that was to follow on how economics can explain voting systems.
While the median voter theorem has clear predications, how do these predictions match reality? Several major pieces of economic literature seem to point to evidence that strongly supports the median voter theorem. For example, Holcombe analyzes the Bowen equilibrium level of education expenditures for 257 Michigan school districts and finds that the actual expenditure levels are only about 3% away from the estimated level in the average district.[5] This study suggests that the median voter theorem provides an explanation for what we empirically see in reality, at least for education expenditures.
However, it is not just isolated cases such as this that suggest the median voter theorem is valid. In fact, in regards to the rise in government redistribution programs over the past few decades, the theorem seems powerfully explanatory. Thomas Husted and Lawrence Kenny examined growth of redistribution programs particularly between the years of 1950 and 1988.[6] Husted and Lawrence postulated that the growth was connected in large part to the expansion of the United States voting franchise. By the late 1950s, Congress had passed legislation which removed two major barriers to voting: poll taxes and literacy tests. With these barriers removed, voter registration and voter turnout increased. Because more people from the lower end of the income scale were added to the franchise, the new median voter was poorer. Those who have lower incomes typically vote for more welfare expenditures. It makes sense, then, that with an increase in the franchise to include people on the lower side of the scale, redistribution programs would increase. This lends credence to the median voter theorem because it seems as though the preferences of the median voter, which were for more redistribution programs, were reflected by the politicians who won the majority vote because redistribution programs increased.
Tom Rice also writes that voters with the median income will take advantage of their majority status by electing politicians that will tax those who are earning more than the median voter, and then redistribute this to those who are below the median. [7] More specifically, Rice demonstrates that if a systematic closing of the gap between people of the median and mean income levels in the United States could be shown, more credibility can be given to the median voter theorem. Up until the mid-1960s, Rice says the gap between median and mean income levels tightened. Three main forces served to tighten this gap. First, the strength of the Democratic Party in Congress in the decades leading up to the 1960s, as Democrats are more disposed to redistribution. Second, increased turnout to the polls, just as Husted and Kenny postulated, tightened the gap because an increase in voters means more individuals of lower income are voting. Finally, since unemployment, which causes median income families to fall below the median income, compared to after the 1960s, was relatively low, this tightened the gap.
The median voter theorem has several limitations. Keith Krehbiel postulates that there are many factors which cause the political process from reaching efficiency.[8] Just like transaction costs prevent efficiency in market exchanges, things in the majoritarian voting process inhibit it from reaching optimality. With the median voter theorem in particular, Krehbiel argues that voters' inability to directly amend legislation inhibits the theorem from holding true. Sometimes, as Krehbiel writes, the policies being voted on are too complex to be placed within a one-dimensional continuum. Buchanan and Tollison also note that this is a problem for median voter theorem, which assumes that decisions can be made on a one-dimensional field. [9] If voters are considering more than one issue simultaneously, the median voter theorem is inapplicable. This may happen if, for example, voters may vote on a referendum regarding education spending and police spending simultaneously.
A larger problem for the median voter theorem, however, is the problem of the incentives structure for government representatives. Downs, in “A Theory of Bureaucracy,” writes that people's decisions are motivated by self-interest, an idea deeply rooted in the writings of Adam Smith.[10] This holds for the government system as well, because it is composed of individuals who are self-interested. One cannot guarantee the degree to which a government representative will be committed to the public good, but it is certain that, to some degree, they will be committed to their own set of goals. These goals can include a desire to serve the public interest, but most often they include the desire for power, income, and prestige. To continue obtaining these things, then, officials must secure their re-election to office. When representatives are constantly focused on becoming re-elected, this distorts the orders they receive from their constituents; representatives will interpret what their constituents want into benefits for themselves.[10] They will tend to vote for short-run policies that will aid in getting them re-elected.[1]