An Overlapping Generations Model of Electoral Competition

Abstract

This paper presents a dynamic model of political competition between two "parties" with different policy preferences. A "party" is explicitly modeled as a sequence of overlapping generations of candidates, all of whom face finite decision horizons. In general, there is a conflict between the interests of the individual policymakers and those of the "party" , which includes subsequent generations of candidates. We characterize this conflict and suggest a scheme of "intergenerational transfers" within the party which can resolve or mitigate this conflict. The paper shows how the "overlapping generations" model can be usefully applied to the political arena.