I

n the immediate future, citizens of Indonesia will engage in two direct elections, one to choose members of parliament and to elect the country's president and vice president.

With more than 170 million eligible voters spread over approximately 17,000 islands, it will easily be one of the largest direct elections in the world.

But what do these elections look like through an economic lens?

Economists usually rest their analysis on the "rational choice theory," which says that individuals will always try to maximize benefit and minimize cost.

Within this framework, a voter will turn out on election day and cast a vote only if they perceive there to be a greater benefit than costs in doing so. The perceived benefits of voting include the possibility that a person's vote will make a difference in the outcome of the election and that satisfaction will come from fulfilling ones civic duty.

The perceived costs of turning out to vote have mostly to do with logistics (getting to the polls, taking the time off work) and the time it takes to research the details of each party or candidates policy platform.

However, simple logic shows that in an election with 170 million eligible voters, one person's vote has almost no chance of deciding the outcome. A single vote can only impact an election when there is a tie, which has essentially zero chance of happening in a nation-wide election. For this reason, a rational voter should not come to the polls on the election day, since the expected benefits of voting will be outweighed by the costs.

In the case of Indonesia's legislative elections, the cost of voting is magnified by the fact that one ballot may have hundreds of candidates from 38 different political parties to choose from.

The cost of informing oneself about each of these candidates and political parties can be very high. It involves spending a great deal of time following their track records, listening to their campaign speeches and comparing their political platforms.

Confronted with such huge costs, voters may decide to stay away from the polls or even from politics at all, a phenomenon identified by economists as "rational ignorance". Such behavior occurs when the cost of educating oneself on an issue exceeds the potential benefit that the knowledge would provide.

The conclusion that a rational voter should not vote leads us to what economists call the "voter's paradox". An individual voter gains more by not voting, but if everyone declined to vote it would spell disaster for society.

This theory is an extension of the well-studied "prisoner's dilemma" but is much more complex and much more common in the real world. Such a situation would be when everyone would be better off if everyone contributed (cooperates), but a particular individual would always be better off not contributing (defecting).

One final issue appealing to an economist regards the economic benefits of voting. Can the system of voting and elections provide better welfare for the society? Is democracy good for the economy?

The economist Robert Barro of Harvard University has tried to answer this question by analyzing panel data from about 100 countries between 1960 and 1990. He found that the overall relation between economic growth and democracy is statistically weak. There is a nonlinear relation - an inverted U-shape - in which growth rises initially with democracy, reaches a peak, and then declines subsequently with further rises in democracy.

Drawing from his study, he offered two lessons. The first is that more democracy is not the key to economic growth, although it may have a weak positive effect for countries that start with few political rights. The second is that political freedoms tend to erode over time if they are out of line with a country's standard of living.

In his inauguration speech as a professor at Gadjah Mada University, Boediono outlined a concept which says that there is a certain income threshold level (around US$ 6600 measured by per capita PPP GDP) below which a democracy in a country is more likely to be short-lived. With an average income level of US$ 4000, Indonesia is not yet in "safe position" to exercise democracy.

The process of democracy in Indonesia is bound to be challenging and risky to the economy.