Endogenous Party Research Articles

Political Competition with Endogenous Party Formation and Citizen Activists

This paper studies the effects of endogenous party formation on political platforms. It develops a model in which parties allow like-minded citizens to, first, share the cost of running in a public election and, second, coordinate on a policy platform. The paper characterizes the set of political equilibria with two competing parties and with one uncontested party. In two-party equilibria, the distance between both platforms is always positive but limited, in contrast to the median voter model and the citizen candidate model. In one-party equilibria, the median voter can be worse off than in all equilibria with two competing parties. (JEL D71, D72)

Incumbent Strategy with Endogenous Valuations and Party Discipline

Incumbent Strategy with Endogenous Valuations and Party Discipline

Political Competition with Endogenous Party Formation and Citizen Activists

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.

Ideological extremism and primaries

This paper is the first one to present a model of primaries with endogenous party affiliations. I show that closed primaries (where only affiliated party members can vote) result in more charismatic candidates than open primaries. This occurs because, in equilibrium, closed-primary voters care more about winning and therefore they are more willing to trade off their ideologically preferred candidate for one who is more likely to win, i.e., a more charismatic one. I also show that under open primaries, the party leaders have higher incentives to choose more extreme platforms. As a consequence, open-primary nominees are more likely to be extremists than closed-primary ones—which is consistent with the most recent empirical evidence. Finally, I show that, if instead of organizing primaries, party leaders were to handpick the nominees, the candidates would be even more moderate and more charismatic.

Single round vs. runoff elections under plurality rule: A theoretical analysis

We compare single round vs. runoff elections under plurality rule, allowing for partly endogenous party formation. With large and sufficiently polarized groups of moderate voters, under runoff elections, the number of political candidates is larger, but the influence of extremist voters on equilibrium policy and hence policy volatility is smaller, because the bargaining power of the political extremes is reduced compared to single round elections. These results are robust to several extentions.

Endogenous party platforms: ‘stochastic’ membership

We propose a model of endogenous party platforms with stochastic membership. The parties’ proposals depend on their membership, while the membership depends both on the proposals of the parties and on the unobserved idiosyncratic preferences of citizens over parties. An equilibrium of the model obtains when the members of each party prefer the proposal of the party to which they belong to, rather than the proposal of the other party. We prove the existence of such an equilibrium and study its qualitative properties. For the cases in which parties use either the average or the median to aggregate the preferences of their members, we show that if the unobserved idiosyncratic characteristics of the parties are similar, then parties make different proposals in the stable equilibria. Conversely, we argue that if parties differ substantially in their unobserved idiosyncratic characteristics, then the unique equilibrium is convergent.

Endogenous party structure

This paper proposes a model of two-party representative democracy on a single-dimensional political space, in which voters choose their parties in order to influence the parties’ choices of representative. After two candidates are selected as the median of each party’s support group, Nature determines the candidates’ relative likability (valence). Based on the candidates’ political positions and relative likability, voters vote for the preferable candidate without being tied to their party’s choice. We show that (1) there exists a nontrivial equilibrium under natural conditions, and (2) the equilibrium party border and the ex ante probabilities of the two-party candidates winning are sensitive to the distribution of voters. In particular, we show that if a party has a more concentrated subgroup, then the party tends to alienate its centrally located voters, and the party’s probability of winning the final election is reduced. Even if voter distribution is symmetric, an extremist party (from either side) can emerge as voters become more politically divided.

Moderating Political Extremism: Single Round versus Runoff Elections under Plurality Rule

We compare single round versus runoff elections under plurality rule, allowing for partly endogenous party formation. Under runoff elections, the number of political candidates is larger, but the influence of extremist voters on equilibrium policy, and hence policy volatility, is smaller because the bargaining power of the political extremes is reduced compared to single round elections. The predictions on the number of candidates and on policy volatility are confirmed by evidence from a regression discontinuity design in Italy, where cities above 15,000 inhabitants elect the mayor with a runoff system, while those below hold single round elections. (JEL C78, D72)

Optimal districting with endogenous party platforms

Representation is one of the most important criteria by which to judge electoral systems. In this paper, I focus on one aspect of representative democracy: the formation of electoral district boundaries. It is well known that majoritarian systems give rise to highly biased seat–vote curves, causing representation to be less than ideal. What should, therefore, be the optimal constituency design when the objective is to maximize voters' welfare? I show that when parties take account of districting while setting platforms, then the district design problem reduces to a very simple rule: do nothing when voters are risk neutral, and — when voters are risk averse — choose a bias that is against the largest partisan group. Calibrating the model on data of the U.S. State legislative elections during the 1990s, I show that the welfare gain due to optimal districting is very small.

Moderating Political Extremism: Single Round vs Runoff Elections Under Plurality Rule

We compare single round vs runoff elections under plurality rule, allowing for partly endogenous party formation. Under runoff elections, the number of political candidates is larger, but the influence of extremist voters on equilibrium policy and hence policy volatility are smaller, because the bargaining power of the political extremes is reduced compared to single round elections. The predictions on the number of candidates and on policy volatility are confirmed by evidence from a regression discontinuity design in Italy, where cities above 15,000 inhabitants elect the mayor with a runoff system, while those below hold single round elections.

Voting blocs, party discipline and party formation

I study the strategic incentives to coordinate votes in an assembly. Coalitions form voting blocs, acting as single players and affecting the policy outcome. In an assembly with two exogenous parties I show how the incentives to accept party discipline depend on the types of the agents, the sizes of the parties, and the rules the blocs use to aggregate preferences. In a game of fully endogenous party formation, I find sufficient conditions for the existence of equilibria with one bloc, two blocs, and multiple blocs.

Secondary issues and party politics: an application to environmental policy

This article develops a political economy model to assess the interplay between party formation and an environmental policy dimension viewed as secondary to the redistributive dimension. We define being a secondary issue in terms of the intensity of preferences over this issue rather than in terms of the proportion of voters who care for the environment. Equilibrium policies are the outcome of an electoral competition game between endogenous parties. We obtain the following results: (i) The Pigouvian tax never emerges in an equilibrium; (ii) The equilibrium environmental tax is larger when there is a minority of green voters; (iii) Stable green parties exist only if there is a minority of green voters and income polarization is large enough relative to the saliency of the environmental issue. We also study the redistributive policies advocated by green parties.

Endogenous Parties in an Assembly

In this article, I show how members of an assembly form voting blocs strategically to coordinate their votes and affect the policy outcome chosen by the assembly. In a repeated voting game, permanent voting blocs form in equilibrium. These permanent voting blocs act as endogenous political parties that exercise party discipline. In a stylized assembly I prove that the equilibrium parties must be two small polarized voting blocs, one at each side of the ideological divide.

Moderating Political Extremism: Single Round vs. Runoff Elections under Plurality Rule

We compare single round vs runoff elections under plurality rule, allowing for partly endogenous party formation. Under runoff elections, the number of political candidates is larger, but the influence of extremist voters on equilibrium policy and hence policy volatility are smaller, because the bargaining power of the political extremes is reduced compared to single round elections. The predictions on the number of candidates and on policy volatility are confirmed by evidence from a regression discontinuity design in Italy, where cities above 15,000 inhabitants elect the mayor with a runoff system, while those below hold single round elections.

Parties for Rent? Ambition, Ideology, and Party Switching in Brazil's Chamber of Deputies

Party switching by legislators has been common in many countries, including the Philippines, Italy, Nepal, Ecuador, Russia, and Japan. While frequently dismissed as simply an indicator of a weak parties, switching provides a unique window on party systems. To the extent that we understand affiliation decisions, we gain insight on the way politicians use parties to advance their careers. In this article I offer a model of party‐membership patterns, where decisions to switch party or to stay put are a function of the strategic interaction of legislators and endogenous party leaders. I test the model on the case of Brazil, where switching is common. Results suggest that Brazilian legislators use parties to maximize pork, ideological consistency, and short‐term electoral success, but which of these matters most depends on constituents, i.e., legislators use parties for different purposes in different electoral environments. The approach developed here could easily be applied to study legislative behavior in other political systems.

A model of endogenous political party platforms

We develop a model of endogenous party platform formation in a multidimensional policy space. Party platforms depend on the composition of the parties’ primary electorate. The overall social outcome is taken to be a weighted average of party platforms and individuals vote strategically. Equilibrium is defined to obtain when no group of voters can shift the social outcome in its favor by deviating and the party platforms are consistent with their electorate. We provide sufficient conditions for existence of equilibria.

Party platforms with endogenous party membership

This paper proposes and analyzes a model of how the behavior of voters and that of potential party activists together determine party membership and the ideological character- istics of party platforms. Membership decisions are based on expressive motivations, whereas platforms are chosen strategically. Part of the ideological spectrum may remain outside both parties because of alienation or indifference.

Political competition: theory and applications

Preface Introduction 1. Political Competition over a Single Issue: The Case of Certainty 1.1 Citizens, Voters, and Parties 1.2 The Downs Model 1.3 The Wittman Model 1.4 Conclusion 2. Modeling Party Uncertainty 2.1 Introduction 2.2 The State-Space Approach to Uncertainty 2.3 An Error-Distribution Model of Uncertainty 2.4 A Finite-Type Model 2.5 Conclusion 3. Unidimensional Policy Spaces with Uncertainty 3.1 Introduction 3.2 The Downs Model 3.3 The Wittman Model: An Example 3.4 Existence of Wittman Equilibrium 3.5 Properties of Wittman Equilibrium 3.6 Summary 4. Applications of the Wittman Model 4.1 Simple Models of Redistribution: The Politics of Extremism 4.2 Politico-Economic Equilibrium with Labor-Supply Elasticity 4.3 Partisan Dogmatism and Political Extremism 4.4 A Dynamic Model of Political Cycles 4.5 Conclusion 5. Endogenous Parties: The Unidimensional Case 5.1 Introduction 5.2 Average-Member Nash Equilibrium 5.3 Condorcet-Nash Equilibrium 5.4 Conclusion 6. Political Competition over Several Issues: The Case of Certainty 6.1 Introduction 6.2 The Downs Model 6.3 The Wittman Model 6.4 Conclusion 7. Multidimensional Issue Spaces and Uncertainty: The Downs Model 7.1 Introduction 7.2 The State-Space and Error-Distribution Models of Uncertainty 7.3 The Coughlin Model 7.4 The Lindbeck-Weibull Model 7.5 Adapting the Coughlin Model to the Case of Aggregate Uncertainty 7.6 Conclusion 8. Party Factions and Nash Equilibrium 8.1 Introduction 8.2 Party Factions 8.3 PUNE as a Bargaining Equilibrium 8.4 A Differential Characterization of PUNE 8.5 Regular Wittman Equilibrium 8.6 PUNEs in the Unidimensional Model 8.7 PUNEs in a Multidimensional Euclidean Model 8.8 Conclusion 9. The Democratic Political Economy of Progressive Taxation 9.1 Introduction 9.2 The Model 9.3 The Equilibrium Concepts 9.4 Analysis of Party Competition 9.5 Calibration 9.6 Conclusion 10. Why the Poor Do Not Expropriate the Rich in Democracies 10.1 The Historical Issue and a Model Preview 10.2 The Politico-Economic Environment 10.3 Analysis of PUNEs 10.4 Empirical Tests 10.5 Proofs of Theorems 10.6 Concluding Remark 11. Distributive Class Politics and the Political Geography of Interwar Europe 11.1 Introduction 11.2 The Luebbert Model 11.3 Testing Luebbert's Theory 11.4 Introducing the Communists: A Three-Party Model 11.5 Conclusion 11.6 Methodological Coda Appendix 11A 12. A Three-Class Model of American Politics 12.1 Introduction 12.2 The Model 12.3 Characterization of PUNEs 12.4 Results 12.5 Conclusion 13. Endogenous Parties with Multidimensional Competition 13.1 Introduction 13.2 Endogenous Parties 13.3 Taxation and Race 13.4 Fitting the Model to U.S. Data 13.5 Quadratic Taxation 13.6 Private Financing of Parties 13.7 A Technical Remark on the Existence of PUNEs 13.8 Conclusion 13.9 Why the Poor Do Not Expropriate the Rich: Reprise 14. Toward a Model of Coalition Government 14.1 Introduction 14.2 The Payoff Function of a Wittman Party 14.3 An Example of Coalition Government: Unidimensional Wittman Equilibrium 14.4 Multidimensional Three-Party Politics 14.5 Coalition Government with a Multidimensional Issue Space: An Example 14.6 Conclusion Mathematical Appendix A.1 Basics of Probability Theory A.2 Some Concepts from Analysis References Index

Party Formation and Policy Outcomes Under Different Electoral Systems

This paper provides a game-theoretic model of representative democracy with endogenous party formation. Coalition formation may occur before and after elections, and the expected payoffs from the after-election majority game affect incentives to form parties before the elections. In this way Duverger's hypothesis can be formally explained by the strategic behaviour of political elites. If politicians care primarily about private benefits, the equilibrium policy outcome under a proportional electoral system coincides with the median party's position. On the other hand, with quasilinear utility, the distance from the median voter outcome may be lower with plurality rule.

Political compromise and endogenous formation of coalitions

A one-dimensional model of spatial political competition with endogenous party formation is developed. It is proved that at equilibrium there are only two parties. These parties propose alternatives in the extreme positions of the policy space. The adopted policy, however, is a compromise between these two extremes.