Political Competition and Polarization

Christian Schultz ()

No 96-07, EPRU Working Paper Series from Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics

Abstract: This paper considers political competition and the consequences of political polarization when parties are better informed about how the economy functions than voters are. Specifically, parties know the cost of producing a public good, voters do not. An incumbent's choice of policy acts like a signal for costs before an upcoming election. It is shown that the more polarized the political parties the more distorted is the incumbent's policy choice.

Date: 1996-07
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Working Paper: Political Competition and Polarization (1996)
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