A model of political parties

Abstract

This paper presents a new model of political parties. I assume that the role of parties is to increase the commitment ability of politicians vis-à-vis the voters. Whereas a politician running alone can only offer his ideal policy, the set of policies that a party can commit to is the Pareto set of its members. I show that the commitment mechanisms provided by the institution of parties has no effect when the policy space is unidimensional; the policies parties can induce in equilibrium arise also when politicians are running independently. However, when the policy space is multidimensional, politicians use the vehicle of parties to offer equilibrium policies that they cannot offer in their absence. Journal of Economic Literature Classification Numbers: D72, C71.

Identity and redistribution

“…30 In addition, the empirical evidence on the relationship between support for anti-immigration parties and the level of unemployment is ambiguous (see Knigge 1998 andGolder 2003). 31 …”

“…30 The political bundling e¤ect in a two-dimensional policy space demonstrated by Roemer (1998) can explain why a voter could vote for a right-wing party although she favors a high degree of redistribution, but not why anti-immigration parties tend to focus on right-wing economic policies in the …rst place. 31 Of course, the absence of any relation between the unemployment rate and anti-immigration sentiments is only an argument against the labor market hypothesis if agents are not perfectly forward-looking regarding the e¤ects of increased immigration, but adjust their beliefs about negative e¤ects of immigration in response to a high level of unemployment. 32 Proposition 4 is only stated for the case when poor whites are in minority since the case when poor whites are in majority follows directly once it is noted that the identity choices of poor blacks do not a¤ect the equilibrium.…”

“…7 A citizen that favors a high degree of redistribution may vote for a political party that advocates a low degree of redistribution if he favors the political party's position on racial issues. Building on Levy (2004), Fernández and Levy (2008) instead consider endogenous political parties where the policy space consists of general redistribution and targeted public goods. For intermediate levels of preference diversity they …nd that the rich might form a winning coalition with special interest groups among the poor to reduce general redistribution.…”

Recent Economic Perspectives on Political Economy, Part I

“…In a citizen-candidate scenario, candidates lacking commitment ability can choose to form parties and offer to the electorate a credible compromise policy position in the interval between their ideal points (a setup similar to Morelli). 53 Absent political parties, in one dimension the unique equilibrium consists of the candidate representing the median running alone (and winning the election unopposed). Adding the possibility of party formation does not affect this result: Levy shows that the commitment ability provided by parties does not enlarge the set of equilibrium outcomes; the median citizen running alone remains the unique equilibrium.…”

Divide and rule: redistribution in a model with differentiated candidates

“…To obtain these results though, he introduces and applies a non-conventional equilibrium concept since such two-dimensional models rarely admit a Nash equilibrium in pure strategies. Moreover Austen-Smith and Wallerstein (2006), Persico (2001, 2004), Levy (2004), Fernández and Levy (2008) and Huber and Ting (2013) also explore how diversity among the voters affects the size of government and the type of redistribution. But in all these papers, preference diversity among voters is considered to be of economic nature (some prefer general interest policies while others prefer specialized transfers) and not in relation to some non-economic issue as in this paper or as in Krasa and Polborn (2014a).…”