TRADING PARLIAMENTARY VOTES FOR PRIVATE GAIN: Evidence of logrolling in the approval of new railways in 19th century Britain
- 29 Mar 2017
New research finds clear evidence of nineteenth century British politicians trading their votes in Parliament to further their private interests in the emerging railway infrastructure. The study by Rui Esteves and Gabriel Geisler Mesevage, to be presented at the Economic History Society’s 2017 annual conference, concludes that the economic costs of this behaviour were significant, leading to Britain creating a less efficient railway network.
Applications for the right to build railways in the mid-1840s had to be ratified by Parliament, and rules were instituted whereby only MPs without financial conflicts and who did not represent a constituency that the railway was intending to service could consider any given application. But this did not prevent MPs trading votes.
Using social network analysis, the new research reveals significant levels of vote-trading, with politicians coordinating their behaviour so as to ensure that the projects they preferred – which they were banned from influencing directly – were nonetheless approved by their colleagues. As much as a quarter of all of the approved projects were likely the result of this ‘logrolling’.
The authors explain the findings of their study in more detail:
The possibility that politicians might act to further their private financial interests, as opposed to the general public interest, has led to the creation of conflict-of-interest rules in modern democracies. For example, the code of conduct of the British Parliament requires that MPs disclose private interests related to their public duties.
In the mid-nineteenth century, Parliament went further, and created a system for the approval of new major public works projects in which MPs with a conflict were barred from voting. But the effectiveness of these rules can be undermined if politicians agree to trade votes with their colleagues -- a practice known as 'logrolling'.
Our research use a unique episode in the mid-nineteenth century to determine whether, and to what extent, British politicians traded their votes to further their private interests.
In the mid-1840s, hundreds of new railway companies petitioned the British Parliament for the right to build railway lines. It was Parliament's responsibility to pick the railway lines they wanted to see built, and in this way shape the development of the modern British transport network.
Since many MPs were also investors in railroads, Parliament created a system of subcommittees, in which the applications for railways would be considered only by MPs without financial conflicts, and who did not represent a constituency that the railway was intending to service.
As a result of this system, MPs with vested interests could not vote for their preferred projects directly. But they could further their interests indirectly by trading their vote on another project with the vote of the MP overseeing the project in which they had an interest.
Drawing on methods from social network analysis, we identify all of the potential trades between MPs, and then test statistically for evidence of vote trading. The statistical evidence reveals significant collusion in the voting patterns of MPs who were deciding which railway lines to approve.
Our findings reveal significant levels of vote-trading, with politicians coordinating their behaviour so as to ensure that the projects they preferred – which they were banned from influencing directly – were nonetheless approved by their colleagues. As much as a quarter of all of the approved projects were likely the result of this logrolling, and the economic costs of this behaviour were significant, leading to Britain creating a less efficient railway network.
Our research highlights the importance of understanding politician's private interests. Moreover, it illustrates how merely acknowledging conflicts of interest, and abstaining from voting when conflicted, may not resolve the problem of vested interests if politicians are able to collude.
Our findings shed light on a perennial problem, and we are hopeful that the methods we have developed to detect logrolling in this setting may prove useful for detecting vote-trading in other contexts.
‘Logrolling for Private Interest: British MPs during the Railway Mania of 1845’
Rui Esteves and Gabriel Geisler Mesevage (University of Oxford)