
<DOC>
<DOCNO>
WSJ911224-0085
</DOCNO>
<DOCID>
911224-0085.
</DOCID>
<HL>
   A Free Marketeer's Case Against Term Limits
   ----
   By Robert J. Barro
</HL>
<DATE>
12/24/91
</DATE>
<SO>
WALL STREET JOURNAL (J), PAGE A6
</SO>
<IN>
ECONOMIC NEWS (ECO)
</IN>
<NS>
ECONOMIC NEWS (ECO)
POLITICS (PLT)
</NS>
<GV>
CONGRESS (CNG)
</GV>
<RE>
NORTH AMERICA (NME)
UNITED STATES (US)
</RE>
<LP>
   To economists, term limits sound like minimum wages, rent
controls and similar interferences with free markets. In each
case, the government tries to prevent a mutually advantageous
trade: an employer hiring a low-productivity, hence, low-wage
worker who is willing to work at that wage; a renter inducing
an increase in the supply of housing by willingly paying a
higher price; and an electorate choosing a desired
representative who is willing to serve. The real surprise is
that some strong supporters of free markets, such as The Wall
Street Journal, have been the biggest advocates of term
limits. What is going on here?
   One argument is that incumbent politicians have unfair
advantages in elections because of their ready access to
campaign funds, staff, mailing and travel privileges, media
publicity, and so on. Hence, the electorate is fooled
systematically into supporting incumbents even when they are
inferior to their challengers. This argument is similar to
the Galbraith-like view that big corporations with massive
advertising budgets can consistently dupe their customers
into buying inferior products. Supporters of free markets and
the capitalistic system reject this message because they have
faith in the self-interested consumer to discipline the
companies that do not deliver the goods. Advocates of the
democratic electoral process ought to have similar confidence
in the public.
</LP>
<TEXT>
Another argument is that a citizen Congress with its continuing flow of fresh faces into Washington would result in better government than that provided by representatives with lengthy tenure. The counter-argument is that experience is an important characteristic for legislators. Each viewpoint has some validity. Presumably the best solution is to let the market decide, that is, to allow the electorate to determine the proper balance between freshness and experience. Most of us would not want the government to determine whether a familiar or a new brand of toothpaste is preferable; why is a political representative different in this respect?

Many commentators bemoan the high tendency for incumbents to be re-elected. But if the electoral control process is working, so that officeholders conform with the interests of the majority of their constituents, then the electorate rewards its representatives with re-election. If the public voted against satisfactory performers just to install a new face, then officeholders would have less incentive to behave and the system would work badly. Thus the main inference from a 95% re-election rate is that the political process is working and that officeholders are conforming to the wishes of their constituents. If we ever see a 50% re-election rate, then there really would be reason to worry.

The threat not to re-elect works only if the incumbent is interested in another term, whether for his current or for another office. A problem with term limits is that it creates more lame ducks, who are less responsive to the desires of the electorate. Much has been made of Alexander Hamilton's reflections on this point in Federalist 72: "One ill effect of the exclusion {from re-election} would be a diminution of the inducements to good behavior." (It is interesting to note, however, that Hamilton was not discussing term limits on the legislature, and was actually arguing against the term limits on the chief executive that are contained now in the 22nd Amendment.)

The only respectable argument in favor of term limits that I know of refers to the legislature and involves the interaction with the seniority system. Representatives accumulate more power as they become more senior, partly because of better committee assignments and more staff and partly because of increased familiarity with government officials and institutions and with outside interest groups. Some aspects of this power, such as greater experience with governmental programs, are desirable; others, such as the increased ability to extract funds from interest groups, are not.

Even if seniority is a net cost in the aggregate, however, each district has an incentive to re-elect its own incumbent (and would if possible vote against the incumbents from other districts) because the representative's relative seniority translates into a large share of governmental largess. The voters would be better off if they could reach a binding agreement that precluded the re-election of incumbents, that is, if term limits were instituted. As an example, the voters of Washington state recently rejected a proposal that would have limited the seniority of their congressional representatives relative to those of other states. Yet the same voters likely would have approved a proposal that limited the terms of all Congressional representatives, not just those from Washington.

Changes in the seniority system may therefore be a superior alternative to term limits. If a representative's power to favor his or her district did not vary with seniority, then voters would not have an excessive incentive to re-elect incumbents. The seniority system could be changed only by getting Congress to alter its own rules (as it has at times in the past) or else by constitutional amendment, which would, from a practical standpoint, also have to initiate in Congress. Although the chances of success seem small, one way to proceed would be to call the proposal the Civil Rights Amendment -- recent experience shows that calling something a Civil Rights Act helps to get it passed. It does not seem to matter much -- it may even be detrimental -- if the content of a Civil Rights Act actually has something to do with civil rights.

The weakening of the seniority system in Congress would, it must be conceded, sacrifice some genuine benefits. Greater experience may justify positions of more authority, and, the rewards from seniority give Congress an efficient method to motivate good behavior from junior members. These arguments parallel the benefits from worker seniority in firms (or, indeed, the usefulness of a parole system as a carrot to help control inmates in prisons). The formal system of seniority is also only a part of the story; members' increasing familiarity with interest groups is a kind of seniority that would not be eliminated by changes in the rules for committee assignments, staffing and so on. It is unrealistic as well as undesirable to try to remove completely the operation of a seniority system in any legislature.

The various complexities about legislative term limits and their interaction with seniority do not arise for executive term limits. Voters do not have to worry that rejecting their incumbent puts them at a disadvantage relative to other voters' incumbents, so the electorate can properly weigh experience, fresh ideas, the value of rewarding satisfactory performance in office, and so on. The only defense for executive term limits is that the electorate needs to be protected against itself, an argument which, if true, would mean that democracy was seriously flawed and would work much less well than it seems to.

Of course, since the passage of the 22nd Amendment in 1951, there is a two-term limit on the presidency, and 29 of the 50 states have some kind of term limit on the governor. (Seven of these limits have been introduced since 1960.)

The origins of these limits may have more to do with competition between legislative and executive branches than with a desire to improve public policy. The 22nd Amendment reflected Congress's desire to shift the balance of power away from the executive, and notably the desire of a Republican-dominated House and Senate to prevent the rise of another powerful Democratic president like Franklin Roosevelt. To some extent, the current pressures for legislative term limits reflect the reverse desire to shift power away from Congress. From the standpoint of balance of power, it would surely be preferable to repeal the 22nd Amendment.

Perhaps the best test of executive term limits is to check whether the states with term limits on the governor have performed better or worse than those without such limits. The answer, if one holds constant geographical region and the level of per capita income in 1960, is that states with term limits experienced slightly below average growth of per-capita income over the last 30 years but were also a little below average in the fraction of state product that went to state and local government expenditures. Not surprisingly, the main message is that executive term limits are not an important determinant of economic growth or state spending.

Executive term limits are therefore a bad idea, but one should not expect vastly better performance at the state or national level from the elimination of these restrictions. Legislative term limits are less clear-cut and it is possible to build a respectable case that favors such limits. But it is unrealistic to think that the enactment of these limits would lead to great improvements in the functioning of government and hence, in the performance of the economy.

Mr. Barro, a professor at Harvard, is a Wall Street Journal contributing editor.
</TEXT>
</DOC>

