Abstract
Members of an assembly that chooses policies on a series of multidimensional ideological issues have incentives to coalesce and coordinate their votes, forming political parties. If an agent has an advantage to organize a party at a lower cost, a unique party forms and the policy outcome moves away from the Condorcet winning policy, to the benefit of party members. If all agents have the same opportunities to coalesce into parties, at least two parties form. The results are robust to the consideration of an endogenous agenda and to generalizations of the distribution of preferences.
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I thank Mik Laver, Luis Corchón and participants in the 2008 Workshop on the Political Economy of Democracy in Barcelona, the 2008 Social Choice and Welfare conference in Montreal, and seminars at U. Autònoma Barcelona, U. Essex and the London School of Economics for insightful comments and suggestions. I completed this paper while visiting the Kellogg School of Management (Northwestern University), and I am grateful for financial support from its Ford Center for Global Citizenship and its Center for Mathematical Studies.
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Eguia, J.X. A spatial theory of party formation. Econ Theory 49, 549–570 (2012). https://doi.org/10.1007/s00199-011-0604-z
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DOI: https://doi.org/10.1007/s00199-011-0604-z