The Political Principal-Agent Problem

This headline came across my Twitter feed today: “As Fairfax grows more diverse, candidates for office mostly don’t.” Immediately I thought of the principal-agent problem. Here is one bit:

“I do think the Republican Party is not doing minority engagement to the fullest extent possible if it’s not eventually nominating candidates that don’t look like me, a white male,” Whitbeck said. “We really need to have an open enough party where we’re nominating people from all communities.”

This actually leads to some interesting questions. Does the inclusion of legislative agents that are more ethnically representative of principals ensure more representative outcomes? In other words, does the Republican Party need to incorporate more diversity in their legislative pool to ensure a broadening of the issues? Or do they need to merely need to seek out and recognize diverse groups when they seek election? There is actually very little data on this topic, but one paper seems to support the general relationship:

Using school district-level data, the paper finds statistically robust evidence that the political representation of minority groups is associated with a more equitable allocation of state aid to school districts. In states in which African Americans gained fairer representation, high minority enrollment school districts saw a greater increase in their state funding as compared to minority districts in states where minorities remained underrepresented. The results are robust to controls for the effect of mandated school-finance reforms, as well as other political and demographic factors. Thus, racial composition of legislatures does matter, not just in a symbolic sense, but also for policy outcomes that reflect diverse interests of society.


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