An Overlapping Generations Model of Electoral Competition

This paper presents a dynamic model of political competition between two "parties" with different policy preferences. A "party" is explicitly modelled as a sequence of overlapping generations of candidates, all of whom face finite decision horizons. In general, there is a conflict between the interests of the individual policymakers and those of the "party" , which includes subsequent generations of candidates. We characterize this conflict and suggest a scheme of "intergenerational transfers" within the party which can resolve or mitigate this conflict. The the paper shows how the "overlapping generations" model can be usefully applied to the political arena. Alberto Alesina GSIA Carnegie—Mellon University Pittsburgh, PA 15213 Stephen Spear GSIA Carnegie-Mellon University Pittsburgh, PA 15213