Polarization and Policy Design

Giovanni Andreottola and Christopher Li

Journal of Political Economy Microeconomics, 2024, vol. 2, issue 1, 1 - 42

Abstract: Voters in the United States and elsewhere are becoming increasingly polarized. Does polarization lead to more-divisive policies? We examine this question in a model of distributive politics and find that polarization can have a nonmonotonic effect on equity. Endogenous political turnover and policy uncertainty play key roles for our results. We also find that polarization may motivate politicians to improve the efficiency of policies and that proportional systems may induce less-equitable policies compared with majoritarian systems.

Date: 2024
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