Contestable Leaderships: Party Discipline and Vote Buying in Legislatures.∗

This paper examines the institutional determinants of discipline in legislative parties. The model formalizes the tradeoff between resources at the leaders discretion, and the incumbents need to maintain a minimum level of support to continue leading. The value of the incumbent leader’s promises of future benefits is here endogenously determined by the backbenchers’ beliefs about the extent of support to the incumbent among other party legislators. Rewards that can be distributed publicly and on the spot are effective tools to coordinate beliefs about the stability of the leader, and thus also increase the value of the incumbent’s promises of future benefits. These spot resources are in fact necessary for the incumbent to be powerful: without them, the incumbent can use promises of future benefits to sway members’ behavior only if a majority of the party agrees (ex ante) with the incumbent’s preferred position in the first place.Journal of Economic Literature Classification Numbers: D72, D78, C72 ∗I am very grateful to David Levine, Andy Atkeson, Hal Cole, Christian Hellwig, Leeat Yariv and Juliana Bambaci for helpful discussions and suggestions. I am also thankful to numerous seminar participants at Caltech, Chicago, Illinois at Urbana-Champaign, Maryland, U. Penn, Princeton, Rice, Stanford, UC Berkeley, UCSD, and Washington University in St. Louis, as well as to many others at UCLA, for useful comments to previous versions of this paper. †Assistant Professor of Economics and Political Science, Division of Humanities and Social Sciences, California Institute of Technology, Pasadena, California 91125, USA, email: [email protected] “. . . as soon as Chamberlain had lost the confidence of a sizeable proportion of his followers in the Commons his powers as Leader of the Party (which seem on paper so impressive) were of no great importance. The vast powers of the Leader of the Conservative Party are exercised only with the consent of his followers . . . However powerful he may be while he enjoys the confidence of his followers his authority evaporates the moment he loses that confidence.” (McKenzie (1964))