How authority bias can impact citizens assemblies

This article first appeared in City A.M. and is written by Paul Ormerod, Cowry’s Chief Economist.

Citizens assemblies have become the height of fashion.  The London borough of Camden is currently holding one on how to reduce carbon emissions in the area.  Last month. Nicola Sturgeon announced plans to set one up to consider constitutional issues in Scotland.

The Irish government one on abortion featured in the 2018 referendum on the matter.

The basic idea is simple.

A small number of citizens, reflecting the socio-demographic characteristics of the population, is selected at random.

The assembly considers a particular topic.  The members get chance to discuss the matter in much more depth than they would usually do. At the close, recommendations are made to the political authority which set the assembly up.

It all sounds very plausible. But economic theory gives us good reasons to be very suspicious of the concept.

One feature of the assemblies is that they are addressed by “experts”, who can be questioned by assembly members.  This is intended to raise the level of both debate and understanding amongst the ordinary people who make up the assembly.

Imagine, however, that a citizens’ assembly had been used in 2016 instead of the Brexit referendum to decide the UK’s position in Europe.

The overwhelming majority of UK economists were opposed to Brexit.  The so-called experts would have spoken on the Treasury’s economic forecasts in Project Fear.  The hapless assembly members would have been assured that a deep and immediate recession would follow any decision to Leave.

Of course, after the event everyone now knows that this expertise was misplaced.

But an important concept in behavioural economics, supported by a lot of empirical evidence, is that of “authority bias”.

People in authoritative positions tend to be trusted.  It would have been very difficult for assembly members to go against the expert advice in a Brexit assembly.

A famous experiment by Stanley Milgram in 1963 showed that many people were willing to administer painful electric shocks to others when instructed to do so by a doctor.  The shocks of course were imaginary, but the participants did not know this.  The findings have been repeated many times.

Experts in the social sciences increasingly share a set of metropolitan liberal values.  And it is these which will be presented to assemblies.

Economic theory is in essence about how agents – people, firms, governments – decide to allocate scarce resources.

An assembly would simply not be properly equipped to consider many policy issues without first of all being given a thorough understanding of the fundamental principles of economics.

One in particular, namely opportunity cost is essential. When an option is chosen from alternatives, the opportunity cost is the “cost” incurred by not enjoying the benefit associated with the best alternative choice.  The concept would have to play a major role in any discussion of climate change, for example.

Strange as it may seem, this idea never seems to be put forward by advocates of the assemblies.

Representative democracy, for all its faults, remains a much better way of making decisions than handing yet more power to so-called experts.

Paul Ormerod is an economist at Volterra Partners LLP, a Visiting Professor in the Department of Computer Science at UCL, and author of Against the Grain: Insights of an Economic Contrarian, published by the IEA in conjunction with City AM