Are political representatives more risk-loving than the electorate? Evidence from German federal and state parliaments

Moritz Heß,Gert G Wagner,Jürgen Schupp,Christian Von Scheve,Aiko Wagner

doi:10.1057/s41599-018-0112-x

Abstract

Political representatives frequently make decisions with far-reaching implications for citizens and societies. Most of these decisions are choices in situations in which the probabilities of gains and losses are hard to estimate. Although decision-making is crucial to politics, existing research has hardly ever addressed the political representation of traits that notably influence decision-making. One such trait is risk propensity; that is, an individual’s willingness to take risk. Using a unique dataset consisting of representative samples of the German Federal Parliament, four German State Parliaments, and the general German population, the present study investigates the degree to which political representatives’ risk propensity resembles their constituents’ appetite for risk. Not only descriptive results but even after using matching techniques and controlling for several potentially confounding variables, the study shows that political representatives are significantly more risk loving than the average citizen across several domains of risk taking. The implications of this finding are twofold. First, it points at a representation gap suggesting that politicians tend towards riskier choices than their voters, which not only affects politicians themselves but the entire polity. Second, it suggests a useful ‘division of labor’ according to which risk-loving politicians are prepared to take risks in exceptional situations, which their constituents would eschew.

Highlights

Political representatives frequently have to make decisions under risk in environments where the probabilities of gains and losses are hard to estimate
Comparing risk attitudes of two representative samples of members of the German Federal and State Parliaments with a representative sample of the German population, our study shows that German politicians are, significantly more risk seeking than the average citizen in all assessed risk domains
Conclusion decision-making under risk is crucial to politics, little is known about the representation of traits that systematically influence decision-making, in particular the risk propensity of voters and politicians

Summary

Introduction

Political representatives frequently have to make decisions under risk in environments where the probabilities of gains and losses are hard to estimate. Many political leaders are known for high risk propensities. They have shown a considerable appetite for risk, for example George Washington crossing the Delaware, Frederik Willem de Klerk ending apartheid in South Africa, and Shinzo Abe restarting Japan’s nuclear power plants after the Fukushima meltdown. When Julius Caesar crossed the Rubicon river, he explicitly mentioned the riskiness of this decision: “Let the die be cast”. Anecdotal evidence points at political leaders shunning away from risky decisions, for instance U.S President Barack Obama’s politics of compromise and appeasement was criticized as too hesitant. When at the end of the eighties a window opened for German unification, Chancellor Kohl made risky decisions. In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

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Conclusion