The Economics of Protesting

All around the world, countries are experiencing large popular unrest. Responses from government have varied: in Algeria, large-scale arrests are a new norm; in Lebanon, law enforcement counter demonstrators with rubber bullets and teargas; and in Haiti, clashes with police have left at least 18 dead. In order to better discern what forces are motivating citizens and their movements to incur such risks, an examination of the rational individual’s decision making, the free-rider, and spoiling as a deterrent of public support is necessary.

The protest decision and the rational individual

A rational behaving individual evaluates the benefits and costs of changing their existing conditions and participates if the gains from the protest decision are sufficient. Economics assumes that the individual will pursue the option that attains the maximum return, id est the highest valued benefits. In the protest decision, a rational individual will prefer the benefits that address the monetary and non-monetary existing conditions; hence, if joining a movement maximizes the preferred benefits, the individual will incur the risk of protest.

Rationality in the protest decision, however, is often subject to imperfect information. Individuals living under a repressive government may under or over evaluate the costs as charges, arrests, and forced disappearances of the protestors are not always publicly recorded. Individuals may also perceive higher benefits to their actions if they are driven by collective solidarity or ideology. Turning to Iraq as an example, despite risking arrest and abduction, demonstrations have persisted as the perceived benefits from system change outweigh all other known costs. Given the extent of imperfect information, the risk-return trade-off that is inherent to the protest decision can be significantly hard to rationalize.

The political collective, a positive network effect, and the free-rider 

When a group of rational individuals decides to protest together, the scale of the protest expands, and the political collective is formed, in effect, a positive network becomes noticeable. A protest displays a positive network effect when an increase in participation increases the observed value of the protest’s monetary and non-monetary aims for all other individuals. Not only does the return to the protest decision increase, but the nature of the effect incentivizes more individuals to incur the risk. Yet, as the protest continues to grow in scale, some individuals have an incentive to not contribute and still reap the long-run benefits; they are referred to as free-riders. In a larger protest, there is an incentive to free ride as the risk-return trade-off is weaker than it would otherwise be in a smaller protest that has less individuals incurring the risk.

Iterations of protests can minimize the incentive to free ride in political collectives. If rational individuals expect for activities to persist and become continuous, they also begin to expect the benefits to aggregate over time as the cost of protesting diminishes with more individuals incurring the same risk. But movements that do become large in scale also tend to become polarized with the use of violence and individual’s differing tactics.

Spoiling in the political collective

Past successful protests have often changed the system through negotiations with government and other authorities. If an individual or a small group within a larger political collective decides to protest with violent action, they could spoil the protest’s negotiation efforts and withdraw public support. Protestors frequently use violence to expand the protest’s bargaining range or pressure the government to meet the protest’s expected benefits by building doubt around the optimum amount of gains. While the protestors’ intentions may be well-intended, the larger economic ramifications of protest that tend to be amplified under violent action could deter the public sphere’s backing. It could also rupture the political collective by linking the legitimacy of the claims to the tactics employed. The latter has occurred in the ongoing Chilean unrest following the use of violence and Roman Catholic bishops’ denouncement of it.

Beyond the briefly identified, there are certainly a number of other factors influencing citizens and their movements to incur the risk and cost of civil disobedience. With major protests identifying inequality, corruption, political freedom, and climate change as the main issues worth disrupting and challenging their current status quo for, large discontent with current institutions appears to be a significant common trend.

First published on Wednesday, November 20, 2019 and edited on Friday, November 22, 2019.

About Alessandra

Alessandra is a second-year Economics student.

2 Replies to “The Economics of Protesting”

  1. But doesn’t having others protesting also increase the appeal (FOMO) and lower expected costs (you are less likely to be identified and carted off if the crowds are big).

    • Definitely! I was thinking more of protests that are mobilizing greater numbers and building towards a larger demonstration but don’t yet have enough individuals incurring the expected costs to create a strong FOMO appeal or lower the risk. Once the protest expands in scale and (most likely) becomes decentralized, these two considerations (and spoiling) become stronger factors in the rational protest decision. Of course, this analysis might not hold much truth anymore with social media. Even in small protests, the FOMO appeal and the risk of being identified could be stronger with the use of tagging and hashtags.

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