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A Theory of Political Competition over Military Policy and Income Redistribution

Author

Listed:
  • Yoshihara, Naoki
  • 吉原, 直毅
  • ヨシハラ, ナオキ

Abstract

We discuss political competition games between Left and Right parties, in which the policy space is two dimensional. One issue is the choice of proportional tax rate, and the second is the allocation of tax revenue between military policies and social welfare policies. On these political issues, the stylized fact is that left-wing parties prefer higher tax rates and lower military expenditure than do right-wing parties. We examine the kinds of political environments in which this fact can be rationalized as the equilibrium outcome of a given political game. By adopting the notion of the party-unanimity Nash equilibrium [Roemer (1998; 1999; 2001; 2005)], not only voters' economic motivations, but also their ideological positions are shown to be crucial factors in explaining stylized party behavior.

Suggested Citation

  • Yoshihara, Naoki & 吉原, 直毅 & ヨシハラ, ナオキ, 2008. "A Theory of Political Competition over Military Policy and Income Redistribution," Discussion Paper Series a503, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hituec:a503
    Note: This version June 2008
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/15848/DP503.pdf
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    More about this item

    Keywords

    multidimensional political competition games; partyunanimity Nash equilibria; military expenditure; ideological concerns;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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