This past June, Vancouver’s Electoral Reform Commission, headed by former B.C. Supreme Court Justice Thomas Berger, made its recommendation for electoral changes at the local level. Specifically, Berger recommended moving from an at-large system of electing city councillors to a ward system with district representation.

Unfortunately, the commissioners and their subsequent recommendation seem to have ignored, or at the very least neglected, the economic costs of electoral reform to taxpayers.

Under Vancouver’s current at-large electoral system, voters choose city councillors and the mayor from an exhaustive list of candidates. The top 10 vote-getters are elected to city council. Under a ward system, the city would be divided into smaller voting areas and citizens would vote for candidates in their geographic area. Essentially, the ward system is similar to the current provincial electoral system in which each MLA represents a specific riding.

There are, of course, benefits to moving to a ward system; the Berger report points to greater representation for geographical areas (specifically the east side), improved opportunities for smaller political parties and independents, and a simplified ballot.

That said, economic theory and empirical evidence indicate that such a transition will be accompanied by significant economic costs to taxpayers.

Economic theory, developed largely by the public choice school of economics, suggests that among other things, the incentives faced by district councillors will be very different than those of councillors elected at-large. In addition, vote-trading (log-rolling in economic jargon) will increase. Both will lead to more spending, more taxes and ultimately more debt.

Specifically, councillors elected at-large will promote policies generally in line with the average voters’ preferences, whereas policies advocated by ward-based councillors will be more closely tied with particular interest groups in their districts. As a result, ward councillors will be more focused on their districts whereas at-large representatives will be more attuned to the general interests of the city.

Second, ward systems tend to promote vote-trading where councillors support measures in order to receive commensurate support for their own district projects. For example, Councillor A supports a new community centre in East Vancouver for the sole purpose of securing Councillor B’s support for a road project in his own district of Point Grey. Such trade-offs lead to more spending on pet projects.

Unfortunately, Vancouver’s Electoral Reform Commission, which cost taxpayers an estimated $300,000, failed to adequately review the academic literature on the economic costs of moving to a ward system. In fact, all told, the 158-page report mentions only one academic study that analysed the impact of ward systems on government spending and taxation; a study published some 24 years ago that analysed a mere 22 American cities, using only 11 years of data from the mid-1940s to the early 1950s. From this, the commission concluded that the cries of alarm about the impact that representation of neighbourhoods [a ward system] would have on economic progress seem to be without real justification.

Several other studies published in respected academic journals, however, directly contradict the commission’s conclusions regarding the economic costs of electoral reform. The most comprehensive of these studies, written by Professor Lawrence Southwick and published in Economics and Politics in 1997, empirically tested whether or not ward systems lead to higher local government taxes, spending and debt in more than 630 American cities.

The results show that a purely at-large council spends between 11.9 and 17.6 per cent less than an all-ward council. On the tax side, an all at-large council taxes between 13.4 to 16.3 per cent less than an all-ward council. Finally, per person local government debt is 68.5 per cent lower in an all at-large council compared to an all-ward council.

In other words, ward systems result in higher levels of government spending, higher levels of taxation and higher levels of debt.

While electoral change is in the air, it will ultimately be Vancouverites who, through a referendum, will decide whether or not to move to a ward system. While there are some benefits to a ward system, Vancouverites must decide if paying higher taxes and accumulating more debt in order to finance more municipal spending are worth these benefits. Hopefully, when the next referendum is held in October, Vancouverites will, unlike Thomas Berger, carefully weigh both the benefits and the costs of moving to a ward system.