Electoral Competition with Costly Policy Changes: A Dynamic Perspective

Hans Gersbach, Matthew Jackson, Philippe Muller and Oriol Tejada

No 14858, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We analyze dynamic electoral competition policy changes. The costs of changing a policy increase with the extent of the shift and generate an incumbency advantage. We characterize the dynamics of Markov equilibria in terms of history and party polarization, and analyze how policies are influenced by the amplitude and convexity of costs of change, as well as by the degree of party and voter farsightedness. Regardless of the initial policy, party choices converge in the long run to a stochastic alternation between two (regions of) policies, with transitions occurring when office-holders suffer a shock to their capacity or valence. Although costs of change have a moderating effect on policies, full convergence to the median voter position does not take place.

Keywords: Democracy; Dynamic elections; Political polarization; Costs of change; Markov perfect equilibrium (search for similar items in EconPapers)
JEL-codes: C72 C73 D72 D78 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-cdm, nep-gth, nep-mic and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Electoral competition with costly policy changes: A dynamic perspective (2023)
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