Ranked Choice Voting and Rethinking Primaries: How Political Innovation Can Increase American Competitiveness

In December 2019, Dr. Michael Porter of the Harvard Business School raised concerns on CNBC about the shocking results of a new survey. In the poll, 5,713 of Harvard’s MBA alumni expressed alarm about the global competitiveness of United States companies. About half the alumni expect U.S. competitiveness to decline between now and 2023, while only about a third expect an improvement.

Dr. Porter reported that researchers who analyzed the data soon discovered why the alums expressed these discouraging views. Survey respondents believe that America is failing to invest in key projects they consider essential to boosting our nation’s global competitiveness, such as investments in infrastructure, public education, and healthcare. And the alums cited a key reason: gridlocked and divisive politics in Washington and state capitals that had brought legislation authorizing appropriations like these to a standstill.

The research connected Dr. Porter with a controversial industry with which he never expected to become involved.

Who is Dr. Michael Porter?

Readers of BSchools and our partner entrepreneurship publication, Busted Cubicle, are familiar with our articles citing the work of Dr. Porter, who holds both MBA and PhD degrees from Harvard University. To the business school community, he’s a living legend. The most cited scholar today in economics and business, Dr. Porter single-handedly invented the academic discipline of competitive strategy—the study of how firms identify and seize upon opportunities they can exploit against competitors.

During that research, he developed the Five Forces Model. This framework analyzes five competitive forces that determine any industry’s weaknesses and strengths: competition, new entrant potential, the power of suppliers and customers, and threats from substitute products. Dr. Porter presented this framework in his landmark 1980 book “Competitive Strategy: Techniques for Analyzing Industries and Competitors,” the treatise which quickly became the bible of the field.

Along with Katherine Gehl, an accomplished CEO who holds an MBA from the Kellogg School of Management at Northwestern University, Porter assembled a working group at HBS that analyzed American politics not from a political science perspective, but as an industry. The group’s work built upon his 40 years of research into competition within a wide variety of sectors. The research will be published in June 2020 in a new book titled “The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy.”

Meanwhile, the group has released two preview reports: Why Competition In The Politics Industry Is Failing America: A Strategy For Reinvigorating Our Democracy and A Recovery Squandered: The State of U.S. Competitiveness 2019.

Based on our advance review of the group’s research in their previews, we’re covering this research well in advance of the book’s publication. That’s because we expect their book will be a blockbuster that advocates America’s most compelling political reforms since the two-party system emerged 170 years ago. And because the Gehl/Porter team’s analysis is so complex, we’re distilling it into only the most essential elements BSchools readers need to understand right away.

Why the Politics Industry Needs Competitive Innovation

In business, competition affords a number of advantages. Competition provides incentives that direct the behavior of companies and their employees toward satisfying a broad range of beneficial objectives.

Once Gehl, Porter, and their HBS team reframed the two-party system as an industry, they found that it displays a structure resembling in some respects the market for commercial jetliners that’s dominated by Airbus and Boeing. That is, the politics industry amounts to a duopoly dominated by only two major players, the Republican and Democratic parties.

The team labels the industry the “political industrial complex.” It comprises the political class in Washington and the state and local capitals, along with related sectors like lobbying, broadcasting, publishing, polling, data assembly and political consulting.

The team concluded that the United States two-party system isn’t broken. On the contrary, it’s performing exactly as it was intended. However, the system isn’t designed to serve us as constituents, but instead has been designed for the benefit of its industry—the political industrial complex.

In other words, their research found that gridlock per se isn’t the problem. They found instead that the real problem was the lack of competition that leads to gridlock and suboptimal outcomes for constituents. Unfortunately, this duopoly cares more about blocking competitive threats than solving constituent problems. The industry concerns itself much more with precluding threats from independent candidates and third parties than with implementing the best solutions. And preventing competition also prevents accountability—which perpetuates dysfunction within the system.

Replacing the Two Most Dysfunctional Industry Practices

Although other anticompetitive practices exist within this industry, the Gehl/Porter team argues that two dysfunctional practices first need to be replaced. These include the partisan primary and plurality voting.

Why Replace Partisan Primaries?

Primary elections effectively reduce competition. Here’s why the Gehl/Porter team explains they would do away with primaries as we know them:

Many elections, especially in districts dominated by a single party, are, in effect, decided in the primary. However, only a small percentage of the electorate votes in primaries. In many states, independent voters are excluded from primaries entirely. Primary voters tend to be more ideological than the party as a whole, often motivated by a single issue they care deeply about, such as immigration. In order to win the primary election, politicians are forced further to the ideological extremes than their constituents on the whole actually want. Partisan primaries are a major reason why there are few moderates remaining in Congress. In addition, the ability of politicians to compromise and engage in bipartisan legislating while in office is limited significantly by the threat of “getting primaried.”

According to Gehl, “candidates often need to thread a narrow ‘eye of a needle’ through which no problem-solving politician can pass.” In other words, candidates need to take more extreme positions on issues that will win their primary election. These expedient positions may be farther to the political left for Democrats or farther to the right for Republicans—but they’re not necessarily the optimal solutions in the best interest of their districts.

Simply called Top Five, here’s the alternative primary they propose, which looks more like the qualifying round in a tournament:

In place of traditional closed-party primaries, Top Five is a single nonpartisan primary open to all voters. The five top finishers advance to the general election. Opening the primary, and expanding the number of candidates who qualify for the general election, will increase electoral competition.

During elections, nonpartisan top-five primaries transfer more influence to a broad array of voters, while today’s system gives major influence to highly partisan primary voters who often determine electoral outcomes. With Top Five primaries, legislators will consider a broader base of constituency when in office and will be able to vote for solutions-oriented bills citizens in their district really want.

Why Replace Plurality Voting?

Most BSchools readers are probably not aware that the traditional voting system in most United States jurisdictions is called “plurality voting,” and have never heard of its leading alternative, which is called “ranked-choice voting,” or RCV. Here’s how the Gehl/Porter team explains ranked-choice voting:

Under our current plurality voting system, the candidate with the most votes wins. But candidates need not secure a majority of votes. In a three-way race, for example, a candidate can win with only 34 percent of the votes, meaning 66 percent of voters in the voting election preferred another candidate. Plurality voting motivates candidates to appeal to their base, but not necessarily to appeal to a majority of voters.

RCV, instead, ensures that the candidate with the broadest appeal to the greatest number of voters always wins. In RCV, voters go to the polls and rank their candidates in order of preference, selecting their top choice, their second choice, and so on. If a candidate receives a majority of first-place votes, he or she wins. If none garners an initial majority, the candidate with the fewest first-place votes is eliminated, and the second-choice of voters who preferred that candidate are then counted. This process continues until there is a majority winner.

In addition to incenting candidates to appeal to a broader cross-section of the electorate and not a just-large-enough partisan base, RCV also allows independent and third-party candidates to run without fear of “spoiling” an election. When voters’ second-place choices matter, they are free to select a non-major-party candidate first, who is less well known, without fear of “wasting” their vote. This feature of RCV injects healthy competition into elections by lowering barriers to new competition.

For these reasons, 18 U.S. cities, including San Francisco, New York City, and Minneapolis have already switched to ranked-choice voting. This alternative also comprises the voting system used across Maine and large portions of Ireland, Australia, and New Zealand.

But Are These Options Feasible?

However, these reforms aren’t likely to deliver more influence to elected officials. On the contrary, options like these could lead to the loss of re-election bids for many incumbents. So why would any elected official, at any level of government, support these two options?

They probably would not. The best option for the Gehl/Porter team and their supporters would be to bypass elected officials entirely. Fortunately, this is possible in states like California with constitutions that provide for initiative ballot propositions. Twenty-six states allow for such ballot initiatives. And currently, such an initiative has qualified for the Massachusetts election in 2020.

The Challenge of Our Times

In closing her April 2019 remarks to the Commonwealth Club in San Francisco, Gehl pointed out that Thomas Jefferson once said that participation in democracy isn’t only about voting—it’s also about participating in writing democracy’s rules.

Rewriting the rules rewrites the outcomes. And reclaiming the promise of our republic is the challenge of our times.