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Party Governance and Political Competition with an Application to the American Direct Primacy


  • Castanheira, Micael
  • Crutzen, Benoît SY
  • Sahuguet, Nicolas


We analyse how the governance structure of political parties influences electoral competition. Parties choose their organization to manipulate the incentives of politicians to provide effort. We show that intra- and inter-party competition interact to shape these incentives. We also get new insights on the role of information, polarization, and on the value of rents from office. More extreme parties tend to prefer less democratic governance structures. Instead, democratic structures are preferred when voters are ill informed about the candidates’ performance and when the rents from office are low. We use our theory to interpret the introduction of the Direct Primary system in the USA at the beginning of the 20th century.

Suggested Citation

  • Castanheira, Micael & Crutzen, Benoît SY & Sahuguet, Nicolas, 2005. "Party Governance and Political Competition with an Application to the American Direct Primacy," CEPR Discussion Papers 4890, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:4890

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    References listed on IDEAS

    1. Dalia Marin & Thierry Verdier, 2008. "Power Inside The Firm and The Market: A General Equilibrium Approach," Journal of the European Economic Association, MIT Press, vol. 6(4), pages 752-788, June.
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    4. Schmidt, Klaus M., 1996. "Managerial Incentives and Product Market Competition," CEPR Discussion Papers 1382, C.E.P.R. Discussion Papers.
    5. Philippe Aghion & Mathias Dewatripont & Patrick Rey, 1999. "Competition, Financial Discipline and Growth," Review of Economic Studies, Oxford University Press, vol. 66(4), pages 825-852.
    6. Martin J. Osborne & Al Slivinski, 1996. "A Model of Political Competition with Citizen-Candidates," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 65-96.
    7. Timothy Besley & Stephen Coate, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 85-114.
    8. Legros, Patrick & Newman, Andrew F., 1996. "Wealth Effects, Distribution, and the Theory of Organization," Journal of Economic Theory, Elsevier, vol. 70(2), pages 312-341, August.
    9. Caillaud, B. & Tirole, J., 1999. "Party governance and ideological bias," European Economic Review, Elsevier, vol. 43(4-6), pages 779-789, April.
    10. Carrillo, Juan D & Castanheira, Micael, 2002. "Platform Divergence, Political Efficiency and the Median Voter Theorem," CEPR Discussion Papers 3180, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Elena Panova, 2008. "Campaign Promises and Political Factions," Cahiers de recherche 0801, CIRPEE.
    2. Federico Quaresima & Fabio Fiorillo, 2017. "The patronage effect: a theoretical perspective of patronage and political selection," Working papers 63, Società Italiana di Economia Pubblica.
    3. JuanD. Carrillo & Micael Castanheira, 2008. "Information and Strategic Political Polarisation," Economic Journal, Royal Economic Society, vol. 118(530), pages 845-874, July.
    4. Indridi Indridason, 2008. "To dissent or not to dissent? Informative dissent and parliamentary governance," Economics of Governance, Springer, vol. 9(4), pages 363-392, October.

    More about this item


    candidates; incentives; internal organization; parties;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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