Electoral Competition and Political Rents

IGIER Working Paper No. 144

28 Pages Posted: 19 May 1999

See all articles by Michele Polo

Michele Polo

Bocconi University - Department of Economics

Date Written: December 1998

Abstract

We analyze the relation between the intensity of electoral competition and the dissipation of political rents. In a model with perfectly informed and heterogeneous voters, two candidates commit to electoral platforms under a majority voting and winner-takes-all rule. If the proposed tax revenues exceed the cost of the public good, the winning candidate retains the surplus (political rents). The candidates are uncertain about voters' preferences. If they do not know the mean of voters' distribution (aggregate uncertainty), competition is relaxed and rents are positive. We then consider some extensions, as ideological positioning, increasing the number of candidates and imperfect commitment to the announced policies.

JEL Classification: H1, H2, H4

Suggested Citation

Polo, Michele, Electoral Competition and Political Rents (December 1998). IGIER Working Paper No. 144. Available at SSRN: https://ssrn.com/abstract=143851 or http://dx.doi.org/10.2139/ssrn.143851

Michele Polo (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

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