Costs of change, political polarization, and re-election hurdles
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Date
2015-09
Publication Type
Working Paper
ETH Bibliography
yes
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Abstract
We develop and study a two-period model of political competition with office- and policy-motivated candidates, in which (i) changes of policies impose costs on all individuals and (ii) such costs increase with the magnitude of the policy change. We show that there is an optimal positive level of costs of change that minimizes policy polarization and maximizes welfare. One interpretation of this finding is that societies with intermediate levels of conservatism achieve the highest welfare and the lowest polarization levels. We apply our model to the design of optimal re-election hurdles. In particular, we show that raising the vote-share needed for re-election above 50% weakly reduces policy polarization and tends to increase welfare. Furthermore, we identify circumstances where the optimal re-electionhurdle is strictly larger than 50%.
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Publication status
published
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Book title
Journal / series
Economics Working Paper Series
Volume
15/222
Pages / Article No.
Publisher
CER-ETH – Center of Economic Research at ETH Zurich
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Edition / version
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Software
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Date collected
Date created
Subject
Elections; Democracy; Political polarization; Cost of change; Re-election hurdles; Political contracts
Organisational unit
03729 - Gersbach, Hans / Gersbach, Hans
02120 - Dep. Management, Technologie und Ökon. / Dep. of Management, Technology, and Ec.