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Political Sophistication and Sovereign Debt Resettlement

- July 31, 2012

K. Amber Curtis, Joe Jupille and David Leblang have a “paper”:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2063955 on Iceland’s “Icesave” referendums, “the only occasions in history on which ‘the people’ were asked to vote directly on sovereign debt resettlement terms.” On the basis of a survey conducted immediately after the second referendum, they find that voting was in part driven by individual self-interest (although their findings are in places equivocal). Perhaps their most interesting tentative finding is that there is no evidence that levels of political sophistication or political knowledge affect voters’ ability to vote their interests.

bq. We suspect—but cannot confirm—that the null result around the conditioning role of political sophistication on interests may have to do with the nature of the informational environment surrounding the Icesave 2 referendum. Recall that Iceland was considered to face near-existential threat from October 2008 forward and had seen the collapse of a government, a currency, and a banking system. The Icesave issue was front-page news regularly from summer 2009 forward, most especially around both the 2010 and 2011 referendums. … We conjecture that in such a massively saturated informational environment, most citizens were able to make well-informed voting choices, leaving relatively no variation in terms of overall sophistication. In other words, the highly salient and publicized context surrounding this particular event may explain why, according to our data, almost all Icelanders appear highly ‘sophisticated’.

This has implications, if it bears out more generally, for broader debates about political knowledge and the circumstances under which voters can and cannot be expected to vote intelligently to further their particular interests.

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