Legislatures vs. Political Parties: Endogenous Policy with Strategic Voters

A model of elections and legislation is analyzed under two types of constitutional framework: with or without legislative initiative. Political parties have policy preferences but need to field candidates who maximize their probability of victory (subject to the constraint of securing the party’s endorsement). At the same time, voters use strategic reasoning in assessing their candidates in a multi-district election. The model predicts that, in spite of the candidates ’ purely electoral motives, voting stances and party will be correlated in the legislature. With legislative initiative, the policy outcomes will gravitate toward the median district, while without it, the parties can fully implement their (divergent) platforms. In this second case, the ability of parties to implement non-centrist policies decreases as the intradistrict homogeneity of the electorate increases. This has implications for the study of endogenous economic policy, in particular the way federalism affects the redistributive outcomes of electoral competition.