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Party Formation and Competition


  • Daniel Ladley


  • James Rockey



In the majority of democratic political systems, districts elect representatives, who form coalitions, which determine policies. In this paper we present a model which captures this process: A citizen-candidate model with multiple policy dimensions in which elected representatives endogenously choose to form parties. Numerical analysis shows that in equilibrium this model produces qualitatively realistic outcomes which replicate key features of cross-country empirical data, including variation consistent with Duverger's law. The numbers of policy dimensions and representatives elected per district are shown to determine the number, size, and relative locations of parties. Whilst multi-member district systems are found to reduce welfare.

Suggested Citation

  • Daniel Ladley & James Rockey, 2010. "Party Formation and Competition," Discussion Papers in Economics 10/17, Department of Economics, University of Leicester.
  • Handle: RePEc:lec:leecon:10/17

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    References listed on IDEAS

    1. Massimo Morelli, 2004. "Party Formation and Policy Outcomes under Different Electoral Systems," Review of Economic Studies, Oxford University Press, vol. 71(3), pages 829-853.
    2. Dutta, Bhaskar & Jackson, Matthew O & Le Breton, Michel, 2001. "Strategic Candidacy and Voting Procedures," Econometrica, Econometric Society, vol. 69(4), pages 1013-1037, July.
    3. Gelman, Andrew & Katz, Jonathan N. & Tuerlinckx, Francis, 2002. "The Mathematics and Statistics of Voting Power," Working Papers 1141, California Institute of Technology, Division of the Humanities and Social Sciences.
    4. Massimo Morelli & Michele Tertilt, 2000. "Policy Stability under Different Electoral Systems," Working Papers 00-13, Ohio State University, Department of Economics.
    5. Antonio Merlo, 2005. "Whither Political Economy? Theories, Facts and Issues," PIER Working Paper Archive 05-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Dec 2005.
    6. Wittman, Donald, 1977. "Candidates with policy preferences: A dynamic model," Journal of Economic Theory, Elsevier, vol. 14(1), pages 180-189, February.
    7. Dhillon, Amrita, 2004. "Political Parties And Coalition Formation," The Warwick Economics Research Paper Series (TWERPS) 697, University of Warwick, Department of Economics.
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    More about this item


    Citizen-Candidate Model; Political Competition; Party Formation; Duverger’s Law; Computer Simulation;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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