Unit 10 Government as economic actor: Economics, politics, and public policy

10.1 Women’s right to vote and the reduction in child mortality in the United States

The first elections in the Wyoming Territory of the United States were held in September 1869. Only men were allowed to vote. But by December the legislature had passed, and the governor had signed, an act to grant women’s suffrage: that is, the right to vote and to hold office. After the bill passed, the Wyoming Tribune wrote that it ‘is likely to be THE measure of the session, and we are glad our Legislature has taken the initiative in this movement, which is destined to become universal. Better appear to lead rather than hinder when a movement is inevitable.’

It took another 50 years and countless battles before, in 1920, the nineteenth amendment to the US Constitution granted women in all states the right to vote.

Since the mid-nineteenth century, American women had organized, petitioned, and picketed to win this right. They had lectured, written essays and articles, marched, lobbied, and even engaged in silent vigils and hunger strikes. They had been met with fierce resistance, having been heckled, jailed, and in some cases attacked with physical violence.

The ratification of the nineteenth amendment in 1920 was a milestone in the fight for universal suffrage in the United States, although barriers to voting remained in place for African Americans (both men and women) until the late 1960s.

In the late 2000s, Grant Miller, an economist working at the Stanford University Medical School, was interested in identifying the policies that influence how healthy people are. He realised that because voting laws differed by state, and were passed at different times, women’s suffrage in the United States was a golden opportunity to explore whether when women have more political power, this could contribute to better public health, especially for children.

natural experiment

An empirical study that exploits a difference in the conditions affecting two populations (or two economies), that has occurred for external reasons: for example, differences in laws, policies, or weather. Comparing outcomes for the two populations gives us useful information about the effect of the conditions, provided that the difference in conditions was caused by a random event. But it would not help, for example, in the case of a difference in policy that occurred as a response to something else that might affect the outcome.

He reasoned that women’s suffrage provides a natural experiment to assess the importance of voting rights on public policy. In behavioural experiments and in other evidence, women on average place a higher value than men on child welfare and public services. In that case, we would expect that public policy would change when women got the vote: for example in Idaho in 1896, California in 1911, Montana in 1914, and Louisiana, Oklahoma, and Michigan in 1918.

Grant Miller used information on when women got the right to vote to do a before-and-after comparison on actions taken by elected officials, public expenditures related to child health, and health outcomes for children.¹ Miller chose to focus on child healthcare policies because women had campaigned to expand health services for children. It is therefore reasonable to assume that women would have chosen different policies at this time than men. During the nineteenth century and before, however, those who argued that only men should vote often claimed that women were represented through their husbands, brothers, and fathers.

The logic of the natural experiment is shown in Figure 10.1, with each of the arrows representing possible causes that Miller explored:

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https://core-book-server.vercel.app/macroeconomics/10-government-as-economic-actor-01-womens-right-to-vote-usa-child-mortality-reduction.html#figure-10-1

Figure 10.1 How voting affects government spending and final outcomes.

For the experiment to convincingly identify the arrows in the figure as causal effects, it must be the case that there were no other likely causes of the change in government spending, and improvement in child health. To rule out this possibility, Miller compared the states and dates for which women got the vote with otherwise similar states and dates in which there was no change in voting rights.

Here is what Miller found:

• Women’s voting boosted state social service spending, which includes public health, by 24% but had no apparent effects on state public spending in other areas. Later, after women got the vote at the federal level, the US Congress voted for a substantial increase in public health spending, especially aimed at children. A historian concluded that ‘the principal force moving Congress was fear of being punished at the polls … by women voters.’²
• The deaths of children under the age of nine fell by somewhere between 8% and 15%, primarily as a result of drops in the kinds of diseases related to the public programmes that had been adopted, especially large-scale door-to-door hygiene campaigns. To put these numbers in perspective, in 1900 one in five children did not live to the age of five.

We return to the question of women’s voting rights in Section 10.5 (for example, in Figure 10.6) and Esther Duflo in an Economist in Action video explains the impact of a massive experiment in India that increased the political power of women.

Miller’s research shows that a big change in public policy resulted when women in the US were directly represented.

Government policies have been discussed throughout The Economy 2.0. So far we have focused on public policy as a potential means for solving economic problems. In doing this we have adopted the perspective of a benevolent social planner: someone whose objective is to maximize societal welfare, help the least well-off, or some other laudable ambition. But real government leaders are not benevolent social planners; they are just people with their own objectives.

In the past the term political economy was used to refer to the whole field of economics.

The approach in this unit—sometimes called political economy—adds politics to the analysis: that is, the process through which governments achieve power and the objectives of the political elites who run the government. So we here consider not what governments could do to solve problems but instead how governments achieve power, and how they choose which policies to implement.

In this unit we focus on the government both as an actor and as the stage on which other actors—business organizations, trade unions, citizens—interact, sometimes cooperatively and sometimes in conflict. We apply some tools of economic modelling to examine the political institutions—including democracy—through which government leaders acquire and maintain power, their objectives, and how they achieve their goals or fail to do so.