A theory on party discipline and vote switching by legislators

We develop a new theory of vote switching by legislators that defect from party line voting. In our model, ideological candidates select their party label and, once elected, vote in parliament. Political parties select their policy platform as to maximize votes while preserving their candidates’ loyalty. We find that legislators that defect from party line voting arise within the majority party. Besides, the more legislators care about their ideology and the less about their own reputation, the more they defect from party line voting. Interestingly, when a party has larger electoral advantage and its candidates sufficiently care about their reputation, such a party can propose a more polarized policy to avoid party defectors. Our model suggests that polarization incentivizes loyalty. Finally, we discuss the robustness of our results in multi-party systems and multi-constituency systems.     

Party voting discipline and the power of parties, legislators and states

We examine the distribution of decision-making power among the principal actors of a federal legislative system; parties, legislators, and constituencies. We are especially interested in how the balance of power between legislators and constituencies depends on the voting discipline exercised by the parties.We derive power measures that are related to the Banzhaf-Coleman index of decision-making power and illustrate with a simple example. Our power measures are novel because they are based on an explicit representation of party voting discipline as well as the structural properties of the decision-making process, whereas previous analyses concentrate on structurally determined power alone.     

Bicameralism and corruption

This paper studies the impact of bicameralism on the level of corruption of elected officials. The relationship between parliamentary organization and corruption is analyzed in a two-period game between legislators, citizens and a lobby group, which delivers several predictions that we empirically investigate using a panel of 35 democracies during the period 1996-2004. Assuming that legislators choose a multidimensional policy on which citizens and a lobby group have opposing interests, we show that bicameralism improves the accountability of legislators to the electorate when the same party controls the two chambers and party polarization is high, while the opposite holds if the two chambers are controlled by different parties. These predictions find strong support in our empirical analysis.     

SAFE SEATS,MARGINAL SEATS,AND PARTY PLATFORMS: THE LOGIC OF PLATFORM DIFFERENTIATION*

This paper analyzes a spatial model of two-party competition where parties are not monolithic decision makers but collections of self-motivated officeholders. Party platforms are chosen collectively by incumbent officeholders. The main result is that in a stable equilibrium party platforms do not converge to the same point. Instead, the parties choose platforms so that voters can distinguish between them, and these platforms divide the set of legislative districts cleanly along party lines. All incumbents prefer this situation to one where the platforms converge, because it improves their own chances of reelection.     

The Origin of Parties: The United States Congress in 1789–1797 as a Test Case

Why do political parties form? I test a theory of party formation in which legislators coalesce into voting blocs to coordinate their votes and influence policy outcomes. I use historical roll‐call data from the United States Congress. During the First and Second Congresses (1789–1793), there were no organized political parties. By the Fourth Congress (1795–1797), the Federalist and Republican parties shaped Congress. The analysis uses the Roll‐call data from the first two Congresses to predict which legislators will coalesce into parties in future Congresses. I compare this prediction with the parties that eventually emerged in the House and in the Senate. I find strong support for the theory in the Senate, and favorable but less significant results in the House.     

A dynamic theory of parliamentary democracy

This paper presents a dynamic model of elections, government formation, and legislation in a parliamentary democracy with proportional representation in which the policy chosen in one period becomes the status quo for the next period. The electorate votes strategically by taking into account the likely governments that parties would form based on their representation and the policies they would choose as a function of the status quo. The status quo thus affects both the election outcomes and the bargaining power of the parties during government formation. A formateur party therefore has incentives to strategically position the current policy to gain an advantage in both the next election and the subsequent bargaining over government formation and policy choice. These incentives can give rise to centrifugal forces that result in policies that are outside the Pareto set of the parties.     

Playing for Your Own Audience: Extremism in Two‐Party Elections

This paper considers a two‐party election with a single‐dimensional policy space. We assume that each voter has a higher probability of observing the position of the party he is affiliated with than the position of the other party, an assumption that is consistent with the National Election Studies (NES) electoral data set. In equilibrium, the two parties locate away from the median, because the voters who dislike a party's platform observe its policy choice with a lower probability, and its own audience like policy choices that cater to its taste. As the asymmetry in voter information or the cost of voting increases, the parties adopt more extreme platforms, while if there are fewer extreme voters the opposite effect occurs. Making voters more symmetrically informed about the two parties' platforms increases the welfare of society, while asymmetric information acquisition by the voters is worse than no information acquisition at all.     

Global sourcing and credit constraints

This paper incorporates credit constraints into a model of global sourcing and heterogeneous firms. Following Antràs and Helpman ( 2004 ), heterogeneous firms decide whether to outsource or integrate input suppliers. Financing of fixed organizational costs requires borrowing with credit constraints and collateral based on tangible assets. The party that controls intermediate inputs is responsible for these financing costs. Sectors differ in their reliance on external finance and countries vary in their financial development. The model predicts that increased financial development decreases the share of integration relative to outsourcing in a country. The effect is more pronounced in sectors with a high reliance on external finance. However, this effect is mitigated by higher productivity (TFP) and headquarter intensity. Empirical examination confirms the predictions of the model. An improvement in financial development from the 25th to the 75th percentile in industries at the 75th percentile in finance dependence relative to those at the 25th percentile is associated with a 16.8% decrease in the median share of US intra‐firm imports. An increase in TFP from the 25th to the 75th percentile in the TFP triple interactions increase the share of US intra‐firm imports at the median by 3.2%. An increase in headquarter intensity from the 25th to the 75th percentile in the headquarter intensity triple interactions increase the share of US intra‐firm imports at the median by 21%.     

Neighbors and friends: How do European political parties respond to globalization?

This paper explores the relationship between globalization and party positions accounting for potential differences between left- and right-wing parties. The analysis is based on a panel model of 36 political parties in 18 Western European countries between 1970 and 2015. We find that right-wing parties move leftward in response to globalization, while left-wing parties do not alter their position. Additionally, we find that ideological party positions are affected by foreign parties’ positions of the same ideological bloc. These findings indicate that there is a convergence towards the left of the political spectrum due to right-wing party moderation.     

Election systems,the “beauty premium” in politics,and the beauty of dissent

We ask three questions. First, do election systems differ in how they translate physical attractiveness of candidates into electoral success? Second, do political parties strategically exploit the “beauty premium” when deciding on which candidates to nominate, and, third, do elected MPs use their beauty premium to reap some independence from their party? Using the German election system that combines first-past-the-post election with party-list proportional representation, our results show that plurality elections provide more scope for translating physical attractiveness into electoral success than proportional representation. Whether political parties strategically use the beauty premium to optimize their electoral objectives is less clear. Physically attractive MPs, however, allow themselves to dissent more often, i.e. they vote more often against the party line than their less attractive peers.     

The Role of Political Parties in the Organization of Congress

This article examines theory and evidence on party competitionin the U.S. Congress in the allocation of members to committees.Parties allocate members to committees to maximize the jointutility of its members, taking into account how the committees'memberships affect the legislation adopted by the legislature.Parties are constrained by both institutional rules and theheterogeneity of party members' preferences. Interest groupratings from the U.S. House of Representatives provide evidencethat the parties stack committees in a manner consistent withthe predictions of the theoretical model. Alternative hypothesesexplain no more than half the committees in the U.S. Congress,while the party competition hypothesis is consistent with theoverall structure of the committees. Model selection tests thatnest the party competition and representative majority partyhypotheses reveal that the party competition hypothesis is supportedby the data while the representative majority party hypothesisis not.     

More federal legislators lead to more resources for their constituencies: Evidence from exogenous differences in seat allocations

Electoral district magnitude varies across German electoral constituencies and over legislative periods due to Germany's electoral system. The number of seats in parliament per constituency is effectively random. This setting permits us to investigate institutionally driven variations in the magnitude of individual constituencies on the allocation of federal resources to these constituencies. We analyze the causal effect of having more than one federal legislator per constituency on federal government resources by exploiting information from 1,379 constituencies from 1998 to 2017. More federal legislators per constituency lead to statistically significantly more employment of federal civil servants. The size of the effect is large and corresponds to about 3.5% of average employment once a constituency is represented by additional legislators from party lists. Robustness tests support our results. Further evidence points to heterogeneity of the effect: Constituencies represented by additional legislators who are experienced and who are members of larger, competing parties obtain more federal resources.     

So closed: Political selection in proportional systems

We analyze political selection in a closed list proportional system where parties have strong gate-keeping power, which they use as an instrument to pursue votes. Parties face a trade-off between selecting loyal candidates or experts, who are highly valued by the voters and thus increase the probability of winning the election. Voters can be rational or behavioral. The former cares about the quality mix of the elected candidates in the winning party, and hence about the ordering on the party list. The latter only concentrate on the quality type of the candidates in the top positions of the party list. Our theoretical model shows that, to persuade rational voters, parties optimally allocate loyalists to safe seats and experts to uncertain positions. Persuading behavioral voters instead requires to position the experts visibly on top of the electoral list. Our empirical analysis, which uses data from the 2013 National election in Italy—held under closed list proportional representation—and from independent pre-electoral polls, is overall supportive of voters' rational behavior. Loyalists (i.e., party officers or former members of Parliament who mostly voted along party lines) are overrepresented in safe positions, and, within both safe and uncertain positions, they are ranked higher in the list.     

Coalition and Party Formation in a Legislative Voting Game

We examine a legislative voting game where decisions are to be made over both ideological and distributive dimensions. In equilibrium legislators prefer to make proposals for the two dimensions together, despite having preferences that are separable over the two dimensions. The equilibria exhibit interaction between the ideological and distributive dimensions, and the set of legislators who approve winning proposals does not always consist of ideologically adjacent legislators. There is more than one ideological decision that has a positive probability of being proposed and approved. We show that legislators can gain from forming political parties, and consider examples where predictions can be made about the composition of parties. Journal of Economic Literature Classification Numbers: D72, C71, C78.     

Does Party Matter? An Historical Test Using Senate Tariff Votes in Three Institutional Settings

This article investigates the historical impact of party andconstituency preferences on tariff votes from the U.S. Senateover the period 1883–1930. We find that the estimatedeffect of party grows during periods in which legislative institutionsfavored strong parties. We conclude that party has a causaleffect on policy. If party serves solely as a proxy for unmeasuredcomponents of personal ideology or constituency preferences,then the estimated effect of party on policy outcomes shouldnot vary contemporaneously with changes in legislative institutions.But if party has an independent causal impact on policy outcomes,then changes in institutions favoring strong parties shouldlead to a greater effect of party on voting behavior, holdingconstituency preferences constant. Although our findings arelimited to votes over tariffs in the 19th and early 20th centuries,they suggest that further research into the mechanism by whichparty affects political decision making is important.     

Competition,benchmarking, and electoral success: Evidence from 69 years of the German Bundestag

The German electoral system ensures that there is always at least one federal legislator per constituency. This legislator can face competition from additionally elected competitors to the Bundestag from precisely the same constituency. The existence of several legislators per constituency allows voters to benchmark their quality against each other. We analyze the causal impact of having more elected competitors from the same constituency on legislators’ personal success versus the success of their parties. Our data cover the legislative terms in the German Bundestag and federal elections in the period 1953–2021. In our analysis, we rely on exogenous variation in elected competitors by investigating changes induced by legislators who leave the Bundestag during the legislative period and their respective replacement candidates as instrumental variables. We find that legislators are less successful in elections when they are exposed to elected competitors from the same constituency. The results suggest that benchmarking possibilities are relevant for voters to evaluate their representatives.     

Party Formation and Policy Outcomes under Different Electoral Systems

I introduce a model of representative democracy with strategic parties, strategic candidates, strategic voters and multiple districts. If policy preferences are similar across districts and not too concentrated within districts, then the number of effective parties is larger under proportional representation (PR) than under plurality, and both electoral systems determine the median voter's preferred policy. However, for more asymmetric distributions of preferences the Duvergerian predictions can be reversed , and the policy outcome with PR is more moderate than the one with plurality. Sincere voting induces more party formation, and strategic voting can be observed more often under PR.     

After You Sir. Hold-Up,Direct Externalities,and Sequential Investment

We propose a solution to the hold-up problem: the parties in a contract can avoid the inefficiencies caused by the possibility of opportunistic behaviour and implement the first best level of investment if they make their investment decision sequentially, one party observing the choice made by the other party before making his own choice. Unlike the existing literature, the proposed solution leads to the efficient choice of investment even when there are two-sided direct externalities.Journal of Economic LiteratureClassification Numbers: D23, D82.     

On the benefits of party competition

We study the role of parties in a citizen-candidate repeated-elections model in which voters have incomplete information. We first identify a novel “party competition effect” in a setting with two opposing parties. Compared with “at large” selection of candidates, party selection makes office-holders more willing to avoid extreme ideological stands, and this benefits voters of all ideologies. We then allow for additional parties. With strategic voting, citizens benefit most when the only two parties receiving votes are more moderate. With sincere voting, even with three parties, extreme parties can thrive at the expense of a middle party; and whether most citizens prefer two or three parties varies with model parameters.     

Simultaneous Price And Quantity Determination In A Joint Profit Maximizing Bilateral Monopoly Under Dynamic Optimization

A long standing controversial issue in the literature surrounding the bilateral monopoly is the determinacy of equilibrium price and quantity when the seller and buyer maximize their joint profits. This controversy led to incorrect presentation of bilateral monopoly solutions in the literature. In this study, we employ a dynamic optimization model to simultaneously determine the equilibrium price and quantity transacted between the buyer and seller. We also show that for the bilateral monopoly to achieve equilibrium they must transact the intermediate product at the hint profit maximizing level. Any deviation from this level will result in one party exercising greater control than the other, and thus, will lead to a situation of either pure monopsony or monopoly, or nonexistence of both parties. [D43, C78,C61]