The Effects of Higher Re-Election Hurdles and Costs of Policy Change on Political Polarization

70 Pages Posted: 11 Jul 2016

See all articles by Hans Gersbach

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Philippe Muller

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Oriol Tejada

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Date Written: July 2016

Abstract

We develop and study a two-period model of political competition where (i) changes of policies impose costs on all individuals, and (ii) such costs increase linearly with the magnitude of the policy change. The contribution is two-fold. First, we show that intermediate marginal costs yield the lowest levels of policy polarization, welfare being a single-peaked function of the marginal cost. Second, we apply our model to the design of optimal re-election hurdles. We show that whatever the marginal cost of change, raising the vote-share needed for re-election above a half reduces policy polarization and increases welfare. We further prove the existence of a unique re-election hurdle that simultaneously maximizes welfare and minimizes policy polarization. The robustness of our results is studied for several extensions of the baseline model, notably for convex costs of change.

Suggested Citation

Gersbach, Hans and Muller, Philippe and Tejada, Oriol, The Effects of Higher Re-Election Hurdles and Costs of Policy Change on Political Polarization (July 2016). CEPR Discussion Paper No. DP11375. Available at SSRN: https://ssrn.com/abstract=2807786

Hans Gersbach (Contact Author)

ETH Zurich - CER-ETH -Center of Economic Reseaarch ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

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Germany

CESifo (Center for Economic Studies and Ifo Institute)

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Germany

Centre for Economic Policy Research (CEPR)

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United Kingdom

Philippe Muller

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

HOME PAGE: http://www.mip.ethz.ch/people/person-detail.html?persid=122870

Oriol Tejada

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
41446329693 (Phone)

HOME PAGE: http://www.cer.ethz.ch/mip/people/toriol

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