SCOPE OF GOVERNMENT: Introduction 3

What a politician does, once in office, will therefore not only reflect his electoral promises, but also his view of the world. As competing politicians differ in their ideologies or along other important dimensions, they remain imperfect substitutes. Because of this imperfect substitutability, rents are not fully dissipated in the course of electoral competition.

Another important theme of our lecture is that the extent of these political failures depends on political institutions. Intuitively, both the electoral rule and the regime type determine the scope and the intensity of political competition. In general, those regimes that promote more intense competition imply policy choices that internalize the benefits and costs of fewer voters. Those regimes therefore bring about less public good provision. But more competition also brings about smaller rents for the politicians.

We develop these ideas in two different models of political behavior. In Section 3, we study a traditional Downsian model of two-candidate electoral competition. We label it pre-election politics, because all the action takes place before the elections. The model assumes that politicians can make binding commitments to policy platforms ahead of the election. Forward-looking voters then choose the policy platform most favorable to them. In this setting, we ask how the electoral rule influences policy choices, contrasting majoritarian and proportional elections.

The central difference is that majoritarian elections make politicians concentrate their competition for votes in certain “marginal” electoral districts. Typically, these districts consist of more mobile voters, who can be more easily swayed by electoral promises. Hence, electoral competition is stiffer under majoritarian elections, as politicians try to please “swing voters” in the marginal districts, rather than swing voters in the population as a whole. Among other things, this leads to more targeted redistribution, at the expense of public good provision. The results in this section draw on earlier insights by Lindbeck and Weibull (1987), Svensson (1997), Lizzeri and Persico (1998), and Polo (1998).

In Section 4, we turn to a very different model of political behavior. We label it post-election politics, as we drop the unrealistic assumption of binding commitments ahead of the election. Here, incumbent politicians set policy once they are in office. And elections serve the purpose of holding these politicians accountable to backward-looking voters. This setting is appropriate for doing comparative politics on a different set of institutions, namely those that allocate decision-making authority. The political constitution is thus viewed as an ’incomplete contract”, specifying who has the right to propose, veto, or amend policy, and in which dimensions. In this setting, we contrast two regime types, presidential and parliamentary.