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A Median Voter Theorem for Postelection Politics

  • Etienne Lehmann
  • Dhammika Dharmapala

We analyze a model of "postelection politics", in which (unlike in the more common Downsian models of "preelection politics") politicians cannot make binding commitments prior to elections. The game begins with an incumbent politician in office, and voters adopt reelection strategies that are contingent on the policies implemented by the incumbent. We generalize previous models of this type by introducing heterogeneity in voters' ideological preferences, and analyze how voters' reelection strategies constrain the policies chosen by a rent-maximizing incumbent. We first show that virtually any policy (and any feasible level of rent for the incumbent) can be sustained in a Nash equilibrium. Then, we derive a "median voter theorem": the ideal point of the median voter, and the minimum feasible level of rent, are the unique outcomes in any strong Nash equilibrium. We then introduce alternative refinements that are less restrictive. In particular, Ideologically Loyal Coalition-proof equilibrium also leads uniquely to the median outcome

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Paper provided by Econometric Society in its series Econometric Society 2004 North American Summer Meetings with number 63.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nasm04:63
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  1. Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, vol. 59(2), pages 219-237, February.
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  4. Kenneth Rogoff, 1987. "Equilibrium Political Budget Cycles," NBER Working Papers 2428, National Bureau of Economic Research, Inc.
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  8. Dharmapala, Dhammika, 1999. "Comparing tax expenditures and direct subsidies: the role of legislative committee structure," Journal of Public Economics, Elsevier, vol. 72(3), pages 421-454, June.
  9. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
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  11. Georges Casamatta, 2003. "The Political Power of the Retirees in a Two-Dimensional Voting Model," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(4), pages 571-591, October.
  12. Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
  13. Torsten Persson & Gerard Roland & Guido Tabellini, . "Comparative Politics and Public Finance," Working Papers 114, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  14. Dixit, Avinash & Grossman, Gene M & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 752-69, August.
  15. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  16. Banks, Jeffrey S. & Sundaram, Rangarajan K., 1998. "Optimal Retention in Agency Problems," Journal of Economic Theory, Elsevier, vol. 82(2), pages 293-323, October.
  17. Wittman, Donald, 1977. "Candidates with policy preferences: A dynamic model," Journal of Economic Theory, Elsevier, vol. 14(1), pages 180-189, February.
  18. Alesina, Alberto & Tabellini, Guido, 1988. "Credibility and politics," European Economic Review, Elsevier, vol. 32(2-3), pages 542-550, March.
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