An Israeli leftist believes that right-wing Prime Minister Neyanyahu can bring peace:
“The left wants to make peace but cannot, while the right doesn’t want to but, if forced to, can do it.”
Why can a right-winger make peace, while a left-winger cannot? There might be many reasons but the one mentioned in this blog must of course draw from Crawford-Sobel’s Strategic Information Transmission which has become the canonical model of the game-theoretic notion Cheap Talk. The key intuition was identified by Cukierman and Tommasi in their AER paper “Why does it take a Nixon to go to China?” (working paper version).
Suppose an elected politician knows the true chances for peace but also has a bias against peace and for war. The the median voter hears his message and decides whether to re-elect him or appoint a challenger. Given the politician’s bias, he may falsely claim there is a good case for war even if it is not true. It is hard for a politician biased towards war to credibly make the case for war. He risks losing the election. But if he makes the case for peace, it is credible: Why would a hawk prosecute for peace unless the case for peace is overwhelming? So the more a politician proposes a policy that is against his natural bias, the higher is the chance he gets re-elected. If the case for peace is strong, a war-biased politician can either propose war in which case he may not get re-elected and the challenger gets to choose policy. Or he can propose peace, get re-elected and implement the “right” policy. In equilibrium, the latter dominates and Nixon is necessary to go China, Mitterand is necessary for privatization etc…
Is this why Netanyahu believes he can make peace? Maybe he cares about leaving a legacy as a statesman. This would make him a less credible messenger – via the logic above, he is biased towards peace and any dovish message he sends is unreliable. Let’s hope that the stories of his strongly his Zionist father and hawkish wife are all true. And then Hamas should fail to derail the negotiations…And Hezbollah should fail in its efforts… And the other million stars that must align must magically find their place….
Cheap Talk 
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September 8, 2010 at 11:42 am
Sid
Was just wondering if things would work out differently if the same analysis was carried out with a slight modification. What I have in mind is the following: Analyse the same problem as a game, with the players being the current incumbent and the challenger, and both have to choose a policy variable (war/peace). In this situation, will the above equillibrium hold? If the pro-war candidate chooses peace just to appear credible, and so does the challenger (because he i s pro-peace), the voters would probably be convinced that peace is the best policy option. But who might they elect to actually implement the peace policy? Even in this case it is possible that they choose the pro-war leader because he may, in general, be viewed as being ‘stronger’ and hence in a position to work out a more favourable peace deal as opposed to his more ‘dovish’ opponent. But the idea of the leader having greater credibility may not go through and the only information being conveyed is that there is consensus around peace. (It would also be interesting to analyse the same problem, within the cheap talk framework as 2-sender, single receiver problem.)
September 8, 2010 at 2:27 pm
Sandeep Baliga
Sid: Two comments:
(1) You assume the challenger has private information about the chance for peace, just like the incumbent. This might not be reasonable if the challenger is an outsider not an insider. If hillary Clinton runs against Obama in the primaries, we might think she is informed but Palin is an outsider so presumably uninformed in a general election. I suppose more reasonable examples of this sort might be given.
(2) In any case, I would love to see the Cukierman-Tommasi model redone. It is a very interesting model, ahead of its time. So, I wonder if there is a more simple model that conveys their ideas. Moreover, they find a particular equilibrium or class of equilibria. Are there other equilibria? This may be hard to work out in their original model and again a simpler model might help.
I am not an expert in this literature and it is worth seeing what people did after this paper.
Sandeep
September 8, 2010 at 3:06 pm
wd40
I have always been skeptical of the “Nixon going to China” explanation. First, when the same example is used over and over again, it maybe because it is the exception more than the rule. Second, politicians make decisions all the time that are contrary to the theory. George Bush got us into Iraq not Clinton. Clinton going into Iraq would have been a “Nixon going to China” example, but Clinton did not invade Iraq. On the other side, Bush going into Iraq was not a “Nixon going to China” example. And more generally, Republicans tend to pursue Republican policies and Democrats tend to pursue Democratic policies. On those occasions where the president does go against his own party, the party is in a quandary as going against the president means going against the party’s standard bearer. I think that is what is going on, not some more complicated explanation of information transmission.
September 8, 2010 at 8:28 pm
Sandeep Baliga
wd40,
First of all – cool handle.
Second – I agree with you that Republicans pursue Republican policies mainly etc. But this point is not inconsistent with information transmission story – for intermediate policies the equilibrium does go that way. It’s only for extreme policies that the Nixon goes to China story applies.
Third, the question is when the President goes against his party, will the electorate re-elect him, not whether his party will support him.
I guess the party will always support him.
What is interesting is that before reading Cukierman-Tommasi, I thought this Nixon story had been settled. But it seems there is more research possible.