Do Voters Pick Good Policy?

Towards the end of Getting It Right, Robert Barro makes the argument against Congressional and Presidential term limits.  Because term limits create lame duck situations in which elected officials are not responsive to constituent desires, Barro concludes that “the best solution is to let the market decide” (158). 

 To his credit, Barro acknowledges this conclusion is “based more on theoretical reasoning than on empirical evidence” (163).  When he does try to weave in empirical evidence -- by comparing the growth of per capita income in states with term limits and those without – he finds the results aren’t strong; he simply does not discover much compelling data.   Still, based heavily on theory, Barro concludes term limits are bad, although not of utmost importance. He acknowledges that Congressional Republicans should “look elsewhere to find productive areas of reform” (164).

 Throughout this passage is the theory that voters should be trusted to choose the right politicians.  He writes that anyone who trusts the free markets “ought to have similar confidence in the public not to reelect the officeholders who are providing unsatisfactory constituent services” (158). Basically, if you believe in the free markets, and that the average man is not easily swayed by monopoly advertising, you must also believe that voters will not vote for political monopolies just because they exist.  Therefore, term limits are unnecessary. Barro’s conclusion, whether intentionally or not, is lodged largely in the theory that democracy works. 

Ignoring the accuracy of this claim itself, this second claim seems to contradict his earlier treatment of democracy in the first section of the same book:

“Rich places consume more democracy because this good is desirable for its own sake and even though the increased political freedom may have a small adverse effect on growth. Basically, rich countries can afford the reduced rate of economic progress.” (11)

 Why compare democracy to the free market, if as an economist you believe democracy can have a small negative effect on growth?*  One could counter that Barro was simply arguing that democracy “working” means constituent preferences are met, no matter how fiscally irresponsible they may be.  But that doesn’t sound right.  And if that’s the case, why does he try to examine “growth of per capita income” in states with and without term limits as a measure of political, and consequentially, economic success?

 So I guess my question is this – should voters be trusted to vote for good or bad fiscal policy?  The first chapter makes it seem that voters vote inefficiently, reducing the rate of economic progress.  He even tells the story of unstable poor countries choosing irresponsible policies that make their countries collapse politically.  But the last chapter makes it seem like voters will always vote for the “good” politicians – the ones that are delivering good economic policy.   Which is it?

 *One could argue that Barro is just observing the U.S. political system (i.e. “rich people”) when he claims that term limits are bad.