Political Consultants Win Even When Clients Don’t

Brendan Nyhan: “Why is the campaign consultant market so inefficient? First, it suffers from what social scientists call an asymmetric information problem. The buyers (candidates) know much less about the service being provided than the sellers (consultants) — the same reason that consumers have a hard time making informed choices on health care. As a result, consultants are often hired based on their prominence or relationships with party insiders rather on than their past performance or other measures of quality.”

“Second, there are few good sources of data about firm performance. Consultant client lists are often not broadly publicized, preventing firms from being held accountable for their performance in past campaigns.”