Andrea Mattozzi, Marcos Y. Perseverance 23 July 2022
Committee decision-making is a central feature of many political and economic institutions, including legislative bodies, government agencies, central banks, law courts, and private and public companies. The issues facing committees are usually multifaceted and complex, often involving various conflicts and personal interests. Committee members are generally motivated by a desire to advance their own careers and a care about being perceived as high-powered decision-makers. Furthermore, they often have different skills or information, so that it is not uncommon to observe situations where some of them are unable to form strong convictions.
In response to the trend towards procedural transparency in central banking, several studies have focused on the impact of transparency of voting procedures on decision-making in committees (e.g. Armstrong et al. 2015, Barwell and Chadha 2014). Indeed, although several committees operate under complete transparency, secret voting systems are also common, where only the final voting results or the total number of votes for each alternative are observed. Gersbach and Hahn (2008, 2013) and Levy (2007) show that secret voting can reduce distortions arising from signaling power. Visser and Swank (2007) show that career anxiety creates an incentive for committees to hide internal disagreements and present a united front in public. From an empirical perspective, Hansen et al. (2018), Meade and Stasavage (2008a, 2008b), and Swank et al. (2008) exploit the decision to make the transcripts of Federal Open Market Committee (FOMC) meetings publicly available to show that transparency changes the nature of deliberations within the committee, significantly reducing dissent among members. In an earlier Vox column, Horvath et al. (2011) discuss the circumstances under which disclosure of voting records improves fiscal policy transparency.
There is considerable anecdotal evidence showing that committee members and legislators behave sharply differently under public and secret ballots. For example, in November 2013, the Brazilian Congress approved a constitutional amendment that changed the method of appointing congressmen in impeachment cases from secret to public voting. The shift from secret to public voting was associated with a major shift in voting behavior, with the average number of votes in favor of expulsion nearly doubling. In June 2017, the Italian Parliament voted on a proposal to change the electoral law of one of its districts. The vote was supposed to be secret but, due to a technical glitch, all the individual votes were shown on a large electronic display for a few seconds while they were being cast. The Speaker of the House realized the mistake within six seconds of the start of the vote and the vote was adjourned a few seconds later. An inspection of the video recording of the session shows that at least 62 members (15% of the total vote) changed their vote in less than eight seconds.
In our recent work (Mattozzi and Nakaguma 2022), we theoretically and empirically study a committee decision-making problem that combines all the elements described above. Specifically, we examine an environment in which committee members are biased toward different alternatives, they differ in their competence levels, they care about their reputation for competence, and they can vote or abstain. In such a context, we investigate how the choice between secret and public voting affects members’ voting behavior and the quality of committee decisions.
A simple framework
Consider a collective decision-making model where a committee must decide by simple majority on a binary agenda, and members can vote for or abstain from alternatives. Committee member pay depends on three elements: (1) a common value ie whether the committee makes the ‘right’ decisions; (2) a personal value ie whether the decision matches the member’s bias; and (3) career concerns, i.e. the member’s ex-post perceived competence. Eligibility and Bias Personal Information. Furthermore, under public voting the individual votes of all committee members are observed, while under secret voting only the total number of votes for each option is observed.1
In this framework, qualified members are informed, they know what the right decision is, so that transparency creates an incentive to vote on it rather than pursuing their personal interests. Conversely, disqualified members are uniform about which option is correct, so that transparency creates an incentive to vote only for their bias or for the previous possible option, even though they would otherwise have preferred to abstain. Indeed, in the absence of career concerns and provided that common value is sufficiently large, it is optimal for ineligible members to abstain, because by doing so they delegate decisions to eligible members, as Fedderson and Pessendorfer (1996) call the ‘curse of the swing voter’. In the presence of career-anxiety, however, such behavior negatively affects perceived competence, since abstinence can be interpreted as a sign of an inability to balance.
The model suggests that voting should be universal in committees where members are influenced by ideological or self-interested motives such as congressional committees. Conversely, votes should be secret when dissent among members due to personal biases is relatively low, as is likely the case for committees of experts and top bureaucrats responsible for technical decisions. In a version of the model where we allow for closed-door deliberation before the voting stage, we show that the level of transparency induces a trade-off between the quality of information aggregation and decision quality during the deliberation stage. Voting stage.
Given that the choice between secret and open voting often involves committee composition as well as the type of decision made, it is difficult to isolate the effect of transparency on voting outcomes using non-experimental data. A lab experiment allows us to collect data on individual voting behavior and compare the quality of decisions made under public and secret ballots while controlling for committee members’ skill levels and biases.
We consider three-member committees with uniform priors and a symmetric distribution of biases and qualifications. We modify our basic setup by assuming that career-related rewards associated with a correct vote are awarded under both open and secret voting. While this simplification retains all the basic features of the original model, we are now modeling the carrier-signal in a reduced fashion. In doing so, we limit attention to examining individual and collective voting behavior without involving human factors in these calculations, taking the reputation establishment process as given. We implement a two-by-two design in which we vary the degree of bias (low or high) and the size of the career-related reward associated with a correct vote, which is lower under secret voting and higher under public voting.2 Our study focuses on a parametrization such that changes in transparency levels can lead to changes in balanced voting behavior. Furthermore, since the theoretical model contains multiple equilibria with different information aggregation characteristics, a laboratory experiment can help inform whether subjects adjust to a particular class of equilibria.
Table 1 reports the proportion of correct decisions under each treatment for both the full sample and a subsample considering only the last five rounds (repetitions) of each experimental session. In the last column, we also report the fraction of correct decisions predicted by our model to be in equilibrium under each treatment. Consistent with the comparative static predictions of the model, decision quality under the ‘low bias’ treatment is greater under ‘secret voting’ than under ‘public voting’, whereas the fraction of correct decisions under the ‘high bias’ treatment is significantly larger than under ‘secret voting’. Public voting.
Table No. 1
Comment: This table reports the proportion of correct decisions observed under each treatment in both the full sample and a subsample considering the last five rounds of each session. The last column reports the fraction of correct decisions predicted to maintain equilibrium by the model.
Figure 1 summarizes the individual behavior of informed and uninformed subjects (i.e. competent and non-competent members of the theoretical framework). Consistent with model predictions, we find that: (i) under the ‘high bias’ treatment, the proportion of informed subjects voting correctly is significantly larger than under ‘public voting’ (Panel A), while (ii) under the ‘low’ bias treatment , the proportion of unknown subjects who abstain is significantly larger under ‘secret voting’ (Panel B). Furthermore, in treatments where there are multiple equilibria, a significant fraction of subjects adjust on the efficient equilibria.
Our analysis identifies a novel trade-off, both theoretically and empirically: the transparency of individual votes reduces pre-existing biases of eligible members and exacerbates biases of ineligible members. Furthermore, public voting leads to better decisions when the degree of bias is large, while secret voting performs better otherwise.
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1 we extend the model to consider an alternative setting where only final decisions are observed under secret voting. In this case, career concerns become directly tied to the quality of committee decisions, so that incompetent members have more incentive to abstain.
2 Both Fehrler and Hughes (2018) and Meloso et al. (2022) find that experimental subjects have a difficult time updating beliefs correctly in the lab.