How Effective Are Monetary Incentives to Vote? Evidence from a Nationwide Policy

Democracy liquid democracy and coalition voting

How Effective Are Monetary Incentives to Vote? Evidence from a Nationwide Policy

How do extrinsic factors like being fined impact voting? This paper examines a real life case study of Peru where mandatory voting has been instantiated since the 1930’s.

This is a very robust work on the topic of incentives and provides plenty of references.

  • Details
    1. Until 2006, the value of the abstention fine was homogeneous throughout Peru. Following that year’s national elections, a reform classified districts into three categories (high, medium and low fine) and differentially reduced the value of the abstention fine.

      Those who abstain from voting are required to pay a fine and until they do are limited from certain government services, such as marriage licenses, doing transactions and private and public banks, accepting public sector jobs etc.

      Collection of fines was low, and amnesties were usually given following 4 years. For the first election after the change 20% was collected, for the following one, 50%, mainly in the high fine districts (a collection unit was set up).

      Fines were set to $25, $12 and $6, based on the region of living which was a large reduction from the ~$42 previous fine. On average, a 10 Peruvian Sol [S/] fine increase (approximately US$3) leads to a 0.5 percentage point (pp) increase in turnout, with a corresponding elasticity of 0.03.

      The average masks several lower level affects and unintended consequences:

    2. Voters registered disproportionately in lower fine jurisdictions, however this is limited to low age voters who can choose where to register.
    3. The second election following the reform had a larger increase, 3x, this is explained by the information gap narrowing. This was judged by Google searches and learning from other research. The inverse is documented among elderly, who are exempt from voting above the age of 69. Between the age of 70 and 75 there’s a 3x increase in non turnout (which isn’t explained by worsening health).
    4. Using a punishment as incentive increases ‘protest votes’: votes that are blank or completely uninformed. Depending on the population of voters this can be alarmingly high. This was increased by 0.27% in blank votes and 0.1% in invalid votes. This compares to a total 0.43% of similar votes in previous elections, meaning that the increase is very large.
    5. Beyond monetary punishment, society has other tools to use, such as government services and this was proven to be more effective. Monetary fines when dropped were 18% of the drop, whereas the rest (82%) was attributed to these other non monetary factors.
    6. Marginal turnout is higher on lower income families, for whom the fine has a larger impact.
    7. Key finding is: “Thus, the non-monetary incentives provided by compulsory voting, which include the expressive value of the law, social image concerns and the non-monetary burden of the sanction, vastly outweigh the monetary incentive provided by the fine.”