DP16037 Using Re-election Thresholds to Curb Political Polarization

Author(s): Hans Gersbach, Philippe Muller, Oriol Tejada
Publication Date: April 2021
Keyword(s): costs of change, Elections, Political Polarization, re-election hurdles
JEL(s): C72, D72, D78, H4
Programme Areas: Public Economics, Organizational Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16037

We examine how tightening reelection hurdles for incumbents can curb political polarization and increase welfare. We use a two-period model in which a politician is elected for office in the first period and enacts a new policy. In the second period, elections take place between the incumbent and a challenger, and the winning candidate chooses the extent to which the first-period policy is reformed. Reforming a policy is costly, and such costs increase with the policy shift and are borne by parties and voters. We show that raising the vote-share needed for re-election above one half reduces policy polarization and increases welfare. Moreover, the latter measures depend on the re-election threshold in a non-monotonic way and a particular (intermediate) threshold simultaneously minimizes policy polarization and maximizes welfare.