Incumbency Disadvantage of Political Parties: The Role of Policy Inertia and Prospective Voting

Satyajit Chatterjee (chatterjee.satyajit@gmail.com) and Burcu Eyigungor

No 19-7, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: We document that postwar U.S. elections show a strong pattern of ?incumbency disadvantage\": If a party has held the presidency of the country or the governorship of a state for some time, that party tends to lose popularity in the subsequent election. To explain this fact, we employ Alesina and Tabellini's (1990) model of partisan politics, extended to have elections with prospective voting. We show that inertia in policies, combined with sufficient uncertainty in election outcomes, implies incumbency disadvantage. We find that inertia can cause parties to target policies that are more extreme than the policies they would support in the absence of inertia and that such extremism can be welfare reducing.

Keywords: rational partisan model; incumbency disadvantage; policy inertia; prospective voting; median voter (search for similar items in EconPapers)
JEL-codes: D72 H50 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2019-01-24
New Economics Papers: this item is included in nep-cdm and nep-pol
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.philadelphiafed.org/-/media/frbp/asset ... ers/2019/wp19-07.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:19-7

Ordering information: This working paper can be ordered from
phil.library.mailbox@phil.frb.org

DOI: 10.21799/frbp.wp.2019.07

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Philadelphia Contact information at EDIRC.
Bibliographic data for series maintained by Beth Paul (beth.paul@phil.frb.org).