Appeasement and compromise under a referendum threat

Leyla D. Karakas ()
Additional contact information
Leyla D. Karakas: Syracuse University

Economics of Governance, 2018, vol. 19, issue 3, No 3, 283 pages

Abstract: Abstract Standard legislative bargaining models assume that an agreed-upon allocation is final, whereas in practice there exist mechanisms for challenging passed legislation when there is lack of sufficient consensus. Such mechanisms include popular vote requirements following insufficient majorities in the legislature. This paper analyzes a one-period legislative bargaining game whose outcome can be challenged through a referendum. I study the effects of this institution on the bills passed in the legislature and analyze the incentives it provides for reaching legislative deals. The proposer party’s trade-off between a larger winning prize and a more threatening opponent in the referendum summarizes the bargaining problem. The results indicate that measures of post-bargaining power do not necessarily translate into higher equilibrium payoffs and that the equilibrium bill may include no concessions from the majority to the minority party. Moreover, caps on campaign spending may incentivize a costly referendum over unanimity in the legislature. These results carry policy implications for regulating various forms of post-bargaining power, such as campaign finance laws for referenda.

Keywords: Political campaigns; Strategic restraint; Contests with endogenous prizes (search for similar items in EconPapers)
JEL-codes: C72 D72 D78 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10101-018-0208-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:ecogov:v:19:y:2018:i:3:d:10.1007_s10101-018-0208-1

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10101/PS2

DOI: 10.1007/s10101-018-0208-1

Access Statistics for this article

Economics of Governance is currently edited by Amihai Glazer and Marko Koethenbuerger

More articles in Economics of Governance from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().