Costs of Change, Political Polarization, and Re-election Hurdles

Hans Gersbach, Philippe Muller () and Oriol Tejada
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Philippe Muller: ETH Zurich, Switzerland

No 15/222, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: We develop and study a two-period model of political competition with office- and policymotivated candidates, in which (i) changes of policies impose costs on all individuals and (ii) such costs increase with the magnitude of the policy change. We show that there is an optimal positive level of costs of change that minimizes policy polarization and maximizes welfare. One interpretation of this finding is that societies with intermediate levels of conservatism achieve the highest welfare and the lowest polarization levels. We apply our model to the design of optimal re-election hurdles. In particular, we show that raising the vote-share needed for re-election above 50% weakly reduces policy polarization and tends to increase welfare. Furthermore, we identify circumstances where the optimal re-election hurdle is strictly larger than 50%.

Keywords: elections; democracy; political polarization; costs of change; re-election hurdles; political contracts (search for similar items in EconPapers)
JEL-codes: D7 H4 (search for similar items in EconPapers)
Pages: 71 pages
Date: 2015-09
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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