Party Formation and Policy Outcomes Under Different Electoral Systems

34 Pages Posted: 13 Jan 1999

Date Written: September 1998

Abstract

This paper provides a game-theoretic model of representative democracy with endogenous party formation. Coalition formation may occur before and after elections, and the expected payoffs from the after-election majority game affect incentives to form parties before the elections. In this way Duverger's hypothesis can be formally explained by the strategic behaviour of political elites. If politicians care primarily about private benefits, the equilibrium policy outcome under a proportional electoral system coincides with the median party's position. On the other hand, with quasilinear utility, the distance from the median voter outcome may be lower with plurality rule.

JEL Classification: C7, D72

Suggested Citation

Morelli, Massimo, Party Formation and Policy Outcomes Under Different Electoral Systems (September 1998). Fondazione Eni Enrico Mattei (FEEM), Working Paper No. 66-98. Available at SSRN: https://ssrn.com/abstract=142035 or http://dx.doi.org/10.2139/ssrn.142035

Massimo Morelli (Contact Author)

Bocconi University ( email )

Via Roentgen 1
Milan, 20136
Italy

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