The Optimal Length of Political Terms

95 Pages Posted: 16 Jun 2020

See all articles by Hans Gersbach

Hans Gersbach

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

Matthew O. Jackson

Stanford University - Department of Economics; Santa Fe Institute

Oriol Tejada

Universitat de Barcelona

Multiple version iconThere are 2 versions of this paper

Date Written: June 2020

Abstract

We analyze the optimal length of political terms (equivalently, the optimal frequency with which elections should be held) when the candidates of two polarized parties compete for office and the median voter shifts over time. Office-holders determine policy and experience persistent random shocks to their valence. Policy changes are costly for citizens and politicians. Optimal term-length balances the frequency of costly policy changes when parties change office with the incumbent's average valence during tenure. We find that optimal term-length increases with party polarization, with the degree to which the median voter cares about valence, and with the frequency and the size of swings in the electorate. In contrast, optimal term-length decreases when candidates for office undergo less scrutiny or when parties care more about future outcomes. Finally, with small swings in the electorate and large polarization, optimal term-length increases if checks and balances increase.

Keywords: costs of change, Elections, Polarization, term-length

JEL Classification: C72, C73, D72, D78

Suggested Citation

Gersbach, Hans and Jackson, Matthew O. and Tejada, Oriol, The Optimal Length of Political Terms (June 2020). CEPR Discussion Paper No. DP14857, Available at SSRN: https://ssrn.com/abstract=3628177

Hans Gersbach (Contact Author)

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

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Matthew O. Jackson

Stanford University - Department of Economics ( email )

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Oriol Tejada

Universitat de Barcelona ( email )

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