Downsian model, the median vote theorem, and Political Parties' Ability

Abstract

The standard Median Voter Theorem says that parties announce a moderate policy. But, in the real world, this does not necessarily hold. In some cases, a party announces an extremist policy and wins the election.
In this paper, we try to explain such cases.In our model, the voters do not know the ability of parties. That is, some parties may be less able. If the less able party wins the election, then the voters' utility is reduced. We assume that each party has his own ideological position. The party, announcing the policy that is distant from his ideological position, needs coordination and so on that are costly. So the less able party hardly announces such a policy.Consequently an extremist policy has signaling effect.
In this paper, we show that there are the cases where the moderate parties with high ability announce an extremist policy. On the other hand, if each party is an extremist, he announces the moderate policy regardless of his ability. Moreover, we analyze the policies and the welfare in the equilibrium. Some derived results are counterintuitive. For example, if the less able party's ability improves, the policy in the equilibrium goes to more extreme one and has negative effect on voters' welfare.