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Generalized Comparative Statics for Political Economy Models

Valerio Dotti

MPRA Paper from University Library of Munich, Germany

Abstract: The Median Voter Theorem is an extremely popular result in Political Economy that holds only if the policy space is unidimensional. This assumption restricts its use to a class of very simple problems. In most applications in the literature this implied an oversimplification of the problem studied, which is one of the possible explanations for the lack of empirical support for several predictions derived with this tool. In this paper I show that under suitable restrictions on individual preferences a Median Voter Theorem can be derived even if the policy space is multidimensional and I derive the comparative statics of the resulting model induced by a change in the pivotal voter. I show that this tool can invalidate the predictions of the Meltzer-Richard model of size of goverment and that it can be useful to study other Political Economy problems that cannot be analyzed using the traditional framework, including games in which players have a richer strategy set than the policy vector to be chosen.

Keywords: median voter; multidimensionality; monotone comparative statics (search for similar items in EconPapers)
JEL-codes: C71 D71 D78 (search for similar items in EconPapers)
Date: 2014-12-17
New Economics Papers: this item is included in nep-mic and nep-pol
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