The political economy of attention

A review paper from NBER hits on something I’ve been thinking about lately: how media and attention factor into political economy.

How do groups of people coordinate to take political action? When are they able to overcome free rider problems? These are central questions in political economy, and one line of thinking says that smaller, organized groups will have an easier time than larger, diffuse groups.

From that you get the notion of distributed benefits and diffuse costs, and vice versa: when a small, organized group bears most of the benefits or costs of a policy, they tend to get their way, even if, on net, it’s a bad policy. Loose banking regulations have concentrated benefits (for bankers) and diffuse costs (to the public). It’s easier for banks to coordinate and hire a lobbyist than for the public to pay close attention to banking regulation. Even if, on net, loose banking regulations are a bad idea, the banks have more motivation and an easier time organizing and so they get what they want.

Except it doesn’t always work that way. Sometimes the media directs enough public attention to an issue that the diffuse public prevails over concentrated, organized interests. And that suggests a big role for models of attention in political economy: when do people pay enough attention and care enough about something to overcome the difficulty that diffuse groups face in politics?

The paper is mostly an empirical review but they have a basic model in which people are trying to decide if it’s worth their time to invest in political action. That involves gauging how likely other people are to take that action, too, and what kind of information they get from the media matters:

“The first key lesson is: the role of media in spreading information may facilitate or hinder collective action, depending on the content of that information…

There is a second key lesson: the effectiveness of the media in spreading information eventually facilitates collective action…

Our third key lesson: homophily in social networks dampens the effect of information on collective action.”

Basically everyone is looking for evidence that other people are willing to participate, too. Media gives them hints as to whether that’s the case or not; the more the media gives you a sense that others will join, the more likely you are to join. The more your network is just filled with people like you, the less confident you are that the information you’re getting is actually a clue about whether others will join (maybe you’re just being fed the small subset of people who are like you).

This is a great topic, and there’s clearly something to this model: you probably are more likely to join the cause if you think there’s lots of energy around it and a realistic chance of success.*

But would you really be put off by the fact that the information you were getting from media was reflecting back just what people like you thought? One, it’s hard to think of someone reflecting on that and then deciding the prudent thing was to discount the quality of the information. Two, for most people the fact that lots of people like you are participating is probably a reason they would choose to participate. Everyone who cares about what you care about will be there: that’s a reason for most people to join, not to say ‘That makes me uncertain of our prospects.’

And that gets to my skepticism about this model. Why model attention rationally in the first place? What if we thought about media and attention as non-rational way that people overcame the selfish desire to free ride? Usually it doesn’t make narrowly selfish, ‘rational’ sense to put in the time for some cause where the benefits are diffuse (opposition to loose banking regulation!) but people don’t just make that sort of decision rationally. They decide in part based on emotion, social cues, and a sense of identity.

In the notes for his political economy course, Daron Acemoglu describes the problem diffuse groups face:

All individuals within the social groups must find a profitable to take the same actions, and often, take actions that are in the interest of the group as a whole. This leads to what Olson has termed the “free rider” problem: individuals may free ride and not undertake actions that are costly for themselves but beneficial for the group. Therefore, any model that uses social groups as the actor must implicitly use a way of solving the free-rider problem. The usual solutions are
• Ideology: groups may develop an ideology that makes individuals derive utility from following the group’s interests.
• Repeated interactions: if individuals within groups interact more often with each other, certain punishment mechanisms may be available to groups to coerce members to follow the group’s interests.
• Exclusion: certain groups might arrange the benefits from group action such that those who free ride do not receive the benefits of group action.
[…Currently, there is little systematic work in economics on how social groups solve the free-rider problem, and this may be an important area for future work…]

The direction I’m thinking comes closest to “ideology”: media taps into individuals’ emotions and sense of identity in ways that make them more likely to participate. You can write that down as a model of utility maximizing with preferences, if you must, but it’s not mostly about gauging the likelihood of success or whether people not like you will contribute.

The question to my way of thinking is why some policy areas capture attention and so make it easier for the public to overcome free rider problems. The minutiae of banking regulation, for example, doesn’t seem to lend itself to that sort of attention-driven coordination; even a couple years after the financial crisis banks were able to defang aspects of Dodd-Frank with out much media attention or uproar.

But the sort of emotion- and affinity-driven model of attention I’m gesturing toward would help understand whether, say, YIMBYism can succeed. That’s a classic political economy problem: a concentrated cohort of property owners benefit from limits on construction while a diffuse group (including people who don’t yet live in the city) would benefit from more building. The property owners show up to all the meetings because they have so much at stake. Can the YIMBY movement overcome that?

The NBER paper’s model would say it depends on whether renters think other renters care. And also that if they think all the loud YIMBYs on Twitter aren’t representative of the public they’ll rationally discount the strength of that as a signal.

Whereas I’d say the question for YIMBYism is whether it can develop an emotional appeal, build a community people want to be a part of, and become a marker of identity and status. Either it’s a movement that sustains attention or it isn’t.

That’s what I’d like to see: a behavioral model of attention, and then study of why different issues so and don’t capture it.

*In some other models this may just make you want to free ride. Oddly that’s not really discussed much; there’s only one mention of free riding in the paper.