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

Abstract

Political parties competing in elections for the power to set public policy face the problem of making credible their policy promises to voters. I argue that this commitment problem crucially shapes party competition over redistribution. The model I develop shows that under majoritarian electoral rules, parties' efforts to achieve endogenous commitment to policies preferred by the middle class lead to different behavior and outcomes than suggested by existing theories, which either assume commitment or rule out endogenous commitment. Thus, left parties can have incentives to respond to rising income inequality by moving to the right in majoritarian systems but not under proportional representation. The model also generates new insights about the anti-left electoral bias often attributed to majoritarian electoral rules, and the strategic use of parliamentary candidates as a commitment device. I find evidence for key implications of this logic using panel data on party positions in 16 parliamentary democracies.