Skip to main content

A dynamic theory of electoral competition

Author(s): Battaglini, Marco

To refer to this page use:
Abstract: We present a dynamic theory of electoral competition to study the determinants of fiscal policy. In each period, two parties choose electoral platforms to maximize the expected number of elected representatives. The platforms include public expenditure, redistributive transfers, the tax rate, and the level of public debt. Voters cast their vote after seeing the platforms and elect representatives according to a majoritarian winner take all system. The level of debt, by affecting the budget constraint in future periods, creates a strategic linkage between electoral cycles. We characterize the Markov equilibrium of this game when public debt is the state variable and study how Pareto efficiency depends on the electoral rule and the underlying fundamentals of the economy. © 2014 Marco Battaglini.
Publication Date: 2-Jun-2014
Citation: Battaglini, M. (2014). A dynamic theory of electoral competition. Theoretical Economics, 9 (2), 515 - 554. doi:10.3982/TE1328
DOI: doi:10.3982/TE1328
ISSN: 1933-6837
EISSN: 1555-7561
Pages: 515 - 554
Type of Material: Journal Article
Journal/Proceeding Title: Theoretical Economics
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.

Items in OAR@Princeton are protected by copyright, with all rights reserved, unless otherwise indicated.