Legislative Bargaining (simple n short) Flashcards
Our models have assumed single candidate/party wins and has complete control over policy
For majoritarian electoral systems but in
proportional electoral systems multiple parties are elected (seats allocated to parties according to vote shares) e.g coalition governments
So thus parties need to agree on policies
So bargaining over policy occurs; at which 2 stages does it occur
Post election:
On government formation
When preparing a budget
What does outcome of bargaining depend on (2)
Agenda-setting - a party’s power to propose policies
The Influence of other parties in government
How can we model bargaining over policy
Extend citizen-candidate model
Ignore election stage since policies decided post-election, to just see the bargaining stage
Citizen candidate extension set up
Suppose 3 partisan politicians elected (care about policy) denoted J ∈ {L,M,R}
Differ (as before) only in income: YL < YM < YR
Therefore have different G bliss points: (ideal government spending - L has lowest income so wants more spending)
gL∗ > gM∗ > gR∗
So what happens (hint: agenda setter)
1/3 is appointed agenda setter (a)
They make a policy proposal ga
Legislature votes on proposal (if 2/3 favour, ga implemented) , if not default policy (status quo) gbar
Now model is set up:
Case 1: Party M, the centrist party is the agenda setter (as J ∈ {L,M,R} )
M implements its preferred policy, sets g=g*m
At least 2 parties vote in favour (since either or both L and R prefer middle over status quo gbar)
Case 2: Party L sets agenda
What happens
It Depends
L will only ever try bring on board M (centrist party) by moving just a little bit
(Never bothers with R as far from L’s optimum g* (bliss point)
So L is agenda setter. Outcome depends
Outcome if
A) g*L < gbar (pg 10)
B) If gm < gbar < gL (pg 10)
C) gbar < g*m (pg 11)
A)
If G*L < Gbar (status quo), L doesn’t have to move from their ideal point since all other parties prefer L over the status quo
B)
L has to deviate and meet at gbar to make M join coalition (since M on board as long as gl <= gbar)
C)
L needs to set a policy that makes M indifferent to the status quo (pg 11 - looks like the symmetry)
So when do L and R perform better
If status quo is worse for M e.g if gbar=0 (v low) or very high) , since not reaching an agreement is painful for M, so willing to go along with a value of g closer to L/R
Impact of condorcet winner: how useful is it in ensuring median preference
Supppose M represents the median voter
Can be pointless, since if M is not agenda setter, median voters preference often not implemented
(Whereas in MVT, condorcet winner is useful in ensuring median voter preference is implemented)
Identity of agenda setter matters.
Also what does power of agenda setter depend on
The status quo default policy (since if status quo policy is unattractive e.g g=0, then agenda setter has more power i.e doesn’t have to deviate since their policy will be preferred already)
Who spends more single vs coalition gov
Coalition
Why?
Coalition gov do not fully internalise the costs of spending
