SFB 303 Discussion Paper No. A - 556

Author: Artale, Angelo, and Hans Peter Grüner
Title: A Model of Stability and Persistence in a Democracy
Abstract: We develop an intertemporal model of political competition which accounts for three stylized facts of political life in representative democracies: (i) the absence of discriminination and excessively cycling majorities (political stability), (ii) a limited degree of political competition and (iii) the persistence of different political outcomes in otherwise similar economies. Our analysis is founded on the observation that political stability is desirable for risk-averse voters. Rational voters should therefore coordinate and restrict policy proposals to "decent" ones, i.e. to proposals which do not discriminate against single groups in favor of the others. We interpret the voting behavior of socio-economic groups as the cooperative solution of the voting-dilemma and derive properties of the set of possible political outcomes.
Keywords: democracy, political stability, political persistence
JEL-Classification-Number: C72, D70, D72
Creation-Date: July 1997
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