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Extreme parties and political rents

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  • Aytimur, Refik Emre

Abstract

We study the rent-seeking behaviour of political parties in a proportional representation system, where the final policy choice of the parliament is a weighted average of parties' policy positions, weights being their vote shares. We find that parties' policy preferences and their rent levels are strongly linked. Our main result is that an extreme party chooses a higher rent level than a moderate party, except in some cases of unlikely distributions of parties. An extreme party has more policy influence than a moderate party since it pulls the final policy towards its position more than a moderate party. Hence, a voter is ready to pay more rents to an extreme party in exchange of a greater policy influence. Furthermore, note that the voter does not need to be an extremist to vote for an extreme party. She is acting strategically in order to influence the final policy in her advantage as much as possible. In turn, this strategic behaviour of voters allow more extreme parties to earn higher rent levels. --

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Bibliographic Info

Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 161.

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Date of creation: 2013
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Handle: RePEc:zbw:cegedp:161

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Keywords: electoral competition; rent-seeking political parties; proportional representation system;

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  1. DE SINOPOLI, Francesco & IANNANTUONI, Giovanna, 2000. "A spatial voting model where proportional rule leads to two-party equilibria," CORE Discussion Papers 2000037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Torsten Persson & Guido Tabellini & Francesco Trebbi, . "Electoral Rules and Corruption," Working Papers 182, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  3. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  4. David P. Baron & Daniel Diermeier, 2001. "Elections, Governments, And Parliaments In Proportional Representation Systems," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 933-967, August.
  5. Matias Iaryczower & Andrea Mattozzi, 2012. "The pro-competitive effect of campaign limits in non-majoritarian elections," Economic Theory, Springer, vol. 49(3), pages 591-619, April.
  6. Neven, Damien J., 1987. "Endogenous sequential entry in a spatial model," International Journal of Industrial Organization, Elsevier, vol. 5(4), pages 419-434.
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