Bargaining in legislatures over private and public goods with endogenous recognition

Abstract

This paper studies a sequential model of multilateral bargaining under majority rule in which legislators make decisions in both private and public good dimensions via an endogenous recognition process. Legislators can expend resources to become the proposer and to make proposals about the allocation of private and public goods. We show that legislators exert unproductive effort to be the proposer and make proposals in both dimensions depending on legislative preferences. Effort choices in equilibrium depend mainly on preferences in both distributional and ideological dimensions as well as the patience level of legislators and the legislature’s size. We also show that in a diverse legislature it may be possible to observe distributive policies when the majority of legislators have collective-leaning preferences, or vice versa.