Economics 362. Economic Models of Politics
Course description: In this course, we will study current research in political
economics, with an emphasis on questions about how different constitutional structures may
affect the conduct of politicians and the performance of government. Topic include
game-theoretic models of electoral competition, candidate positioning, party formation,
legislative bargaining, and lobbying. In the first two weeks, we will go through the four
models surveyed in my paper "Economic analysis of political institutions: an
introduction," in Advances in Economic Theory and Econometrics, vol. 1, D. Kreps and
K. Wallis eds. (Cambridge, 1997), pp. 46-65. (We will also use notes
from European Economic Review 43:671-697.) Thereafter, the main textbook for this
course will be T. Persson and G. Tabellini, Political Economics
(MIT, 2000). Each student who is registered for a grade in this course will write and
present in class a review of some paper or papers of interest in the recent literature.
For a more readings, see sections III and IV of the Econ 309
course outline from last term.
Spring2001, Tuesdays and Thurdays 12:00-1:20 pm. Instructor: Roger Myerson.
T. Persson and G. Tabellini, Political Economics (MIT, 2000).
R. Myerson, "Analysis of democratic institutions: structure, conduct, and
performance," Journal of Economic Perspectives 9:77-89 (1995).
R. Myerson, "Economic analysis of political institutions," in D. Kreps and K.
Wallis, Advances in Economic Theory and Econometrics 1:46-65 (Cambridge, 1997).
R. Myerson, "Theoretical comparison of electoral systems," European Economic
Review 43:671-697 (1999).
Institutional Comparative Politics
C. Friedrich, Constitutional Government and Democracy (Harper, 1937; 4th ed Ginn, 1968).
G. Cox, Efficient Secret (Cambridge, 1987).
R. Taagepera and M. Shugart, Seats and Votes (Yale, 1989).
M. Laver and N. Schofield, Multiparty Government (Oxford, 1990).
M. Shugart and J. Carey, Presidents and Assemblies (Cambridge, 1992)
M. Laver and K. Shepsle, eds., Cabinet Ministers and Parliamentary Government (Cambridge,
G. Cox, Making Votes Count (Cambridge, 1997).
Comparison of Electoral Systems Persson-Tabellini (8, 9.2)
D. Rae, V. Hanby, J. Loosemore, "Thresholds of representation and thresholds of
exclusion," Comparative Political Studies 3:479-488 (1971).
W. Riker, "The two-party system and Duverger's law," American Political Science
Review 76:753-766 (1982).
G. Cox, "Electoral equilibrium under alternative voting institutions," American
Journal of Political Science 31:82-108 (1987).
G. Cox, "Centripital and centrifugal incentives in electoral systems," American
Journal of Political Science 34:903-935 (1990).
A. Lijphart, "The political consequences of electoral laws, 1945-1985," American
Political Science Review 84:481-496 (1990).
S. R. Reed, "Structure and behavior: extending Duverger's law to the Japanese
case," British J. of Political Science 20:335-356 (1990).
R. Myerson and R. Weber, "A theory of voting equilibria," American Political
Science Review 87:102-114 (1993).
R. Myerson, "Effectiveness of electoral systems for reducing government
corruption," Games and Economic Behavior 5:118-132 (1993a).
R. Myerson, "Incentives to cultivate favored minorities under alternative electoral
systems," American Political Science Review 87:856-869 (1993b).
G. Cox, "Strategic voting equilibria under single non-transferable vote,"
American Political Science Review 88:608-621 (1994).
J. Carey and M. Shugart, "Incentives to cultivate a personal vote: a rank ordering of
electoral formulas," Electoral Studies 14:417-439 (1995).
R. Myerson, "Comparison of scoring rules in Poisson voting games," to appear in
Journal of Economic Theory (2001).
Spatial models and median voters Persson-Tabellini 2, 3.1-3.3, 6
H. Hotelling, "Stability in competition," Economic Journal 39:41-57 (1929).
D. Black, "On the rationale of group decision making," Journal of Political
Economy 56:23-34 (1948).
A. Downs, An Economic Model of Democracy (Harper and Row, 1957).
A. Meltzer and S. Richard, "A rational theory of the size of government,"
Journal of Political Economy 89:914-927 (1981).
Probabilistic Voting Persson-Tabellini (2.3), 3.4, 7.4, 8
P. Coughlin and S. Nitzan, "Electoral outcomes with probabilistic voting and Nash
social welfare optima," Journal of Public Economics 15:113-121 (1981).
J. Ledyard "Pure theory of two-candidate competition," Public Choice 44:7-41
A. Dixit and J. Londregan, "Determinants of success of special interests in
redistributive politics," Journal of Politics 58:1132-1155 (1996).
S. Lohmann, "An information rationale for the power of special interests,"
American Political Science Review 92:809-827 (1998).
R. Myerson, "Informational origins of political bias towards critical groups of
voters," European Economic Review 43:767-778 (1999).
Entry and positioning of partisan candidates Persson-Tabellini
M. Osborne, "Spatial models of political competition under plurality rule,"
Canadian Journal of Economics (1995) 28:261-301.
M. Osborne and A. Slivinski, "A model of political competition with
citizen-candidates," Quarterly Journal of Economics 111:65-96 (1996).
T. Besley and S. Coate, "An economic model of representative democracy,"
Quarterly Journal of Economics 112:85-114 (1997).
Retrospective voting and agency Persson-Tabellini 4, 9, (10)
R. Barro, "Control of politicians," Public Choice 14:19-42 (1973).
J. Ferejohn, "Incumbent performance and electoral control," Public Choice
J. S. Banks and R. K. Sundaram, "Adverse selection and moral hazard in a repeated
elections model," in W. Barnett, M. Hinich, and N. Schofield, eds., Political Economy
T. Persson, G. Roland, and G. Tabellini, "Separation of powers and political
accountability," Quarterly Journal of Economics 112:1163-1202 (1997).
D. Austen-Smith and J. Banks, "Electoral accountability and incumbency," in P.
Ordeshook, ed., Models of Strategic Choice in Politics (Michigan, 1989).
J.J Laffont, Incentives and Political Economy (Oxford, 2000).
S. Rose-Ackerman, Corruption and Government (Cambridge, 1999).
Legislative structure, agendas, and bargaining Persson-Tabellini
(2.3), 5.4, 7.2, (9.3), 10
T. Romer and H. Rosenthal, "Political resource allocation, controlled agendas, and
the status quo," Public Choice 33(4):27-43 (1978).
K. Shepsle, "Institutional arrangements and equilibrium in multi-dimensional voting
models," American Journal of Political Science 23:27-59 (1979).
K. Shepsle and B. Weingast, "Structure induced equilibria and legislative
choice," Public Choice 37:503-519 (1981).D. Baron and J. Ferejohn, "Bargaining
in legislatures," American Political Science Review 83:1181-1206 (1989).
V. Crawford and J. Sobel, "Strategic information transmission," Econometrica
T. Gilligan and K. Krehbiel, "Collective decisionmaking and standing
committees," Journal of Law Economics and Organization 3:287-335 (1987).
B. Weingast and W. Marshall, "Industrial organization of congress," Journal of
Political Economy 96:132-163 (1988).
D. Austen-Smith and J. Banks, "Elections, coalitions, and legislative outcomes,"
American Political Science Review 82:405-422 (1988).
D. Baron and J. Ferejohn, "Bargaining in legislatures," American Political
Science Review 83:1181-1206 (1989).
T. Gilligan and K. Krehbiel, "Asymmetric Information and Legislative Rules with a
Heterogeneous Committee," American Journal of Political Science 33:459-490 (1989).
K. Shepsle and M. Laver, "Coalitions and cabinet government," American Political
Science Review 81:873-890 (1990).
R. McKelvey and R. Riezman, "Seniority in legislatures," American Political
Science Review 86:951-965 (1991).
J. Huber, "The vote of confidence procedure in parliamentary democracies,"
American Political Science Review 90(2):269-282 (1996).
V. Chari, L. Jones, and R. Marimon, "The economics of split voting in representative
democracies," American Economic Review 87:957-976, (1997).
D. Diermeier and T. Feddersen, "Cohesion in legislatures and the vote of confidence
procedure," American Political Science Review 92:611-621 (1998).
D. Diermeier and R. Myerson, "Bicameralism and its consequences for the internal
organization of legislatures," American Economic Review 89:1182-1196 (1999).[pdf preprint]
A. Dixit, G. Grossman, and F. Gul, "A theory of political compromise," Journal
of Political Economy 108:531-568 (2000).
Lobbying Persson-Tabellini 3.5, 7.3-7.6
M. Olson, Logic of Collective Action (Harvard U. Press, 1965).
G. Becker, "A theory of competition among pressure groups for political
influence," Quarterly Journal of Economics 98:371-400 (1983).
J. Snyder, "Campaign contributions as investment," Journal of Political Economy
J. Snyder, "On buying legislatures," Economics and Politics 3:93-110 (1991).
R. Morton and C. Cameron, "Elections and the theory of campaign contributions,"
Economics and Politics 4:79-108 (1992).
D. Baron, "Electoral competition with informed and uninformed voters," American
Political Science Review 88:33-47 (1994).
G. Grossman and E. Helpman, "Electoral competition and special interest
politics," Review of Economic Studies 63:265-286 (1996).
A. Dixit, G. Grossman, and E. Helpman, "Common agency and coordination," Journal
of Political Economy 105:752-769 (1997).
T. Groseclose and J. Snyder, "Buying supermajorities," American Political
Science Review 90:303-315 (1996).
URL of this course page: http://home.uchicago.edu/~rmyerson/econ362.htm