Essays on Political Parties, their Organization, and Policy Choice

Abstract

The primary aim of this thesis is to advance economics' understanding of the organization of political parties, for the purpose of explaining the policy choices that result from collective decision procedures. Motivating this inquiry is the benign neglect that the political party as an organization has long suffered from in economics, in a manner that mirrors depictions of the firm in early neoclassical analysis.

Accordingly, this thesis first considers the question of the relative influence of different contributors to the political parties' electoral activities, i.e. special-interest groups contributing money and individual party activists volunteering their time, on their choice of policy platforms. It is found that the presence of activists induces parties to offer differentiated policy platforms, even in the presence of a special-interest group whose contributions are perfectly substitutable with those of activists. Concurrently, the special interest's influence is to bias the parties' platforms towards its preferred policy.

Second, the internal dynamics of parties organized into factions sharing common goals are investigated. It is studied how they affect the party leader's choice of policies while in office and her accountability to voters, through the threat of her removal from the party's helm. While occasionally acting as a distortion on the election mechanism's effectiveness for keeping politicians accountable, the presence of the politician's party is accountability-enhancing especially in the presence of other distortions. This contributes to a second-best theory of politics.

This thesis' secondary aim is to contribute to restoring the use of moral and ethical concerns in normative analysis and political economy. This is warranted by the fact that moral and ethical motives matter more in such contexts than in most market transactions, where rational self-interested behaviour largely prevails.

This objective is primarily represented in this thesis' study of normative analysis as conditioned on a societal consensus. This study asks how redistributive policies are to be optimally-chosen when the extent of societal co-operation regarding work participation depends on a social norm. Its main finding is that constraining the social planner's choices on the extent of societal cohesion restricts the scope of redistribution compared with an unconstrained social planner.