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Professor Roger Bowden

Referenda and the sway of public opinion

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That referendums can lead to disintegration of rational thought and political process has become abundantly evident from the chaos that has followed the UK Brexit referendum of June 2016. You might describe the subsequent House of Commons debates, including the recent vote, as the deafening sound of brains impacting in unison. And it isn’t over yet, with increasing calls for the March 29 due date to be postponed to allow time for a second referendum.

In the process, it became clear after a legal challenge that the original Brexit referendum itself had to be regarded as nonbinding, with the final authority vested in Parliament. You might think it odd that in the lodestone of modern democracy, the distinction did not seem to have been understood. Our own NZ referendums are likewise nonbinding. By way of contrast, Switzerland makes regular use of referendums that are binding; about four times a year, sometimes on issues that might strike you or me as more than a tad trivial. ‘Direct democracy’ they call it, or more loosely ‘plebiscite’, though the latter is more commonly used for proposed constitutional changes.

Nonbinding referendums could be viewed as little more than sampling public opinion, and in this respect modern online technology makes them almost as feasible as sample surveys, indeed much to be preferred given the selection bias so often evident in the latter.  But there is a more serious argument, calling on the economic theory of agency, that can extend just as readily to binding referenda. Our parliamentary elections are dominated by party politics and party policies, often founded on unidimensional economic or sociological platforms having little to do with fundamental issues that might entail possibly conflicting personal moral principles. In such instances, even a conscience vote in Parliament might suffer from the agency problem. Gay marriage is, or was, an instance, and in this respect the Australian government made the correct call in having a referendum, and agreeing to make it (in effect) binding.

But President Truman’s famous remark “find me a one handed economist” applies in the present context. ‘On the other hand’ from time to time there do arise issues that may require special expertise that cannot be readily communicated to the populace at large; or in doing so achieve any sort of balanced assessment evaluating the arguments for or against. We’re talking here about things like media bias, a pervasive problem round the world, much more of a problem these days than it ever was in the past. But provided we can trust them to do so, parliamentarians, e.g. as select committees, are better placed to assess reports from the experts they might call into help them. That’s one reason why in the process of law we have juries to weigh up arguments for whodunnits and the like.

Brexit is arguably of this genre. My own reaction when I first heard of it was ‘how on earth are they going to handle Northern Ireland?’ That was bad enough. But then there was a veritable can of worms in assessing the economic case for or against and coming to an overall valuation; the Net Present Value (NPV) of Brexit, so to speak.

Closer to home, the proposed referendum on legalising recreational marijuana is arguably of the above kind. More on this in due course.  Here I note only an emerging debate as to whether or not THC (the active principle) is harmful to brain development among teenagers. There is evidence to suggest it might be, especially with the enhanced THC levels of recent cultivars (roughly tripled since the ‘sixties), though just what areas of the brain are most impacted is still being studied.  Moreover in this particular instance it’s not just the issue of expertise. Also at stake is whether the parents of teenagers shouldn’t be given extra weight in any decision process, and whether a referendum is the best way of ensuring that.

 My take away from all this is that referendums do have a place, even binding ones. But it is best to call on these when the issues are clear and easily understood by everyone in the community. Brexit or not might have seemed clear at the time, driven as it was mainly by fears of uncontrollable immigration across the Channel. But it was not of this genre. As Oscar Wilde remarks: ‘The truth is rarely pure and never simple’. In such cases, perhaps best leave it to parliaments. That way we’ll know who to blame it if all goes wrong.