When Extremes Meet: Redistribution in a Multiparty Model with Differentiated Parties
35 Pages Posted: 16 Aug 2015
Date Written: August 13, 2015
In this paper we consider a multi-party electoral competition model in which parties -- which care both about implemented policy and their electoral performance -- strategically promise a redistribution scheme while their social ideologies are considered to be known and fixed (differentiated parties). Voters, who differ both in income and in social ideologies, vote sincerely for the party that they cumulatively like most (that is, taking into account both the redistribution scheme proposals and parties' social ideologies). Formal analysis of this game uncovers an ends-against-the-middle equilibrium: parties with moderate social ideologies tend to be in favour of generous redistribution, while parties with extremist social ideologies are more likely to fervently oppose such schemes. An implication of this result is that, ceteris paribus, an increase in income inequality should lead to an increase in the cumulative vote share of moderate parties and, hence, in a decrease in party-system fragmentation.
Keywords: redistributive politics, taxation, differentiated candidates, policy motives, social polarization, multi-party elections
JEL Classification: D72, H20
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