DP3180 Platform Divergence, Political Efficiency and the Median Voter Theorem

Author(s): Juan D Carrillo, Micael Castanheira
Publication Date: January 2002
Keyword(s): median voter theorem, moral hazard, party competition
JEL(s): D72, D78, L15
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=3180

The Paper analyses a standard Downsian model of election with two opportunistic parties. We assume that, after choosing their ideological position but before the election takes place, parties can affect the quality of their platforms by exerting some unobservable effort. When voters either (almost) always or (almost) never observe the resulting quality before the election, the standard Median Voter Theorem holds. For the more general case of imperfect observability of quality, however, we show that parties may optimally deviate from the median voter?s bliss point as an implicit commitment to exert high effort (and therefore obtain a high-quality platform). The Paper thus argues that extremist parties are endogenously more committed to their ideas than moderate parties. Moreover, the extra quality implied by the divergence of parties will sometimes offset their worse ideology proposed, in which case the voters? welfare under divergence is greater than under convergence of platforms. Last, we endogenize the amount of information revealed to voters by assuming that a profit maximizing press collects the news about the quality of parties and sells it to the electorate. We show that the press may collect an amount of information that is excessively high from a social viewpoint.