"Party Formation in Parliamentary Democracies"

Cakir, Selcen, Economics - Graduate School of Arts and Sciences, University of Virginia
Stern, Steven, Department of Economics, Stony Brook University
McLaren, John, Department of Economics, University of Virginia
Friedberg, Leora, Department of Economics, University of Virginia

The political power of elected representatives is determined by politicians' membership negotiations with parties. In parliamentary systems, party control over government functions generates club goods, which increases the value of party membership. Moreover, in party-centered parliamentary systems, getting influential positions requires party leader's approval, which gives the leader monopsonistic recruiting power. As a result, politicians may relegate their political power to leaders when membership is more rewarding than acting independently. I develop an equilibrium model of party formation in a parliamentary democracy that incorporates parties' provision of club goods, rent sharing between politicians and party leaders, as well as politicians' outside options. Politicians' rankings of parties critically depend on the size of the party as well as on their own political assets. Through their control of government functions, bigger parties can provide greater club goods but tax politicians' rents more upon entry. Because of this, politicians with more assets tend to prefer smaller parties. I structurally estimate my model for Turkey with a unique dataset of 33 parties, 2,000 politicians who gained seats in parliament, and 35,000 politicians who were on party ballot lists between 1995 and 2014. My model matches the high level of party switching (28.5%) that is characteristic of many party-centered systems. I find that Turkish parties accumulate club goods more easily than they produce rents, which leads to ever stronger party control. I also find that politicians with good labor market options are not productive in the political arena. In a counterfactual analysis, I find that members of smaller (bigger) parties are more powerful in party-centered (candidate-centered) systems.

PHD (Doctor of Philosophy)
Clubs, Rent-Seeking, Coalitions, Particular Labor Markets, Matching Models
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