Political Competition with Endogenous Party Formation and Citizen Activists

Abstract

The paper studies the eect of endogenous party formation on platform choice in plurality elections. Policy-motivated citizens can form parties in order to share an exogenous cost of running in the general election and nominate a presidential candidate in primary elections. Thus, parties allow like-minded citizens to coordinate their political behavior in order to improve the policy outcome. The paper concentrates on political equilibria with two active parties which exist for all levels of membership cost and electoral uncertainty. In contrast to the citizen candidate model (Besley and Coate 1997) and the classical median voter model (Downs 1957), there can neither be full convergence nor extreme polarization of party platforms in equilibrium. Crucially, allowing for endogenous party formation eliminates the extreme multiplicity of equilibria in the citizen candidate model. This insight is provided most clearly in the benchmark case of full electoral certainty, where a unique political equilibrium with positive platform distance exists.