Endogenous Credible Commitment and Party Competition Over Redistribution Under Alternative Electoral Institutions

Abstract

Democracies do not legally bind parties to their policy promises. Thus winning the power to set policy through elections requires making credible commitments to pivotal voters. This paper analyzes theoretically and empirically how the commitment problem affects partisan conflict over redistribution. A theoretical model shows that under majoritarian electoral rules parties' efforts to achieve endogenous commitment using candidate selection to policies preferred by the middle class leads to different behavior and outcomes than suggested by existing theories that assume commitment or rule out endogenous commitment. Left parties may respond to rising inequality by moving to the right in majoritarian systems but not under proportional representation. The theory also unbundles the anti-left bias attributed to majoritarian systems. The empirical analysis finds evidence for key implications of this logic using panel data on party positions and by analyzing devolution in Britain as a natural experiment to compare candidates under alternative electoral rules.