Electoral Control in the Presence of Gridlocks

Abstract

This article presents a game-theoretic partisan model of voting and political bargaining. In a two-period setup, voters first elect an executive incumbent and the legislators from a pool of candidates belonging to different parties. Once elected, the executive and the legislature bargain over a budget. Party origin and a relevant parameter of the economy, the state of the world, influence the bargaining cost, such that political gridlocks may occur. At the end of the first period voters observe the outcome of bargaining but do not observe the true estate of the world, and decide whether or not to reelect the same parties for the Executive and the Legislature. The model confirms the very recent literature by showing that voters tend to have more flexible reelection criteria when they believe the true state of the world is likely to be unfavorable. On the other hand, when voters believe the true state of the world is likely to be favorable, they become more demanding in order to reelect the incumbents. In particular, there will be government shutdown with positive probability in equilibrium. Gridlocks occur due to the imperfect information of voters and is indeed an information revelation mechanism that improves electoral control in the second period