Optimal Term-Length and the Structure of Democracy

Hans Gersbach, Matthew Jackson and Oriol Tejada

No 14857, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Periodic elections are the bedrock of democracy, but the power they grant to the median voter entails dynamic inefficiencies. We analyze the optimal frequency of elections (equivalently, the optimal term-length) to minimize such inefficiencies. We start with a simple dynamic model of two polarized parties where the voters’ preferences shift over time, office-holders experience random shocks to their effectiveness, and policy changes are costly. Optimal term-length balances the frequency of costly policy changes against the benefit of replacing ineffective incumbents. Our baseline model is then augmented with additional factors that may influence optimal term-length, and it yields comparative statics regarding when political terms should be longer or shorter.

Keywords: Elections; Term-length; Costs of change; Polarization (search for similar items in EconPapers)
JEL-codes: C72 C73 D72 D78 H10 H40 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in 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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