Productive Policy Competition and Asymmetric Extremism

Viable policies must be developed by individuals and groups with the expertise and willingness to do so. We develop a model in which competing policy-motivated developers differ in their intrinsic ideological extremism and ability at crafting high quality policies. The unique equilibrium exhibits unequal participation, inefficiently unpredictable and extreme policies and outcomes, wasted effort, and an apparent advantage for extreme policies. While asymmetries between the developers always reduce observable competition, they can nevertheless benefit the decisionmaker. This contrasts starkly with the classic all-pay contest -- where the decisionmaker is always harmed by asymmetries due to the discouragement effect -- and results from the developers' policy motivations. I also introduce and solve a broader class of generalized policy contests that nests both the policy-development model and the all-pay contest, and develop new methods for solving asymmetric contests with spillovers. Broadly, my analysis provides a novel rationale for why extreme actors may dominate policymaking that is rooted in the nature of policy development, and highlights the difficulty in assessing the normative implications of such dominance.