Maximizing political efficiency via electoral cycles: An optimal control model

The exchange between an elected politician, such as a president, prime minister or a local governor and interest groups is analyzed as an optimization problem. The optimal control model shows the conditions required from regulatory policy and resource investment in order to maximize the politician’s utility from the interest group’s support. Given one interest group, such a policy includes two time intervals: Well in advance of the elections the politician in office should invest a constant level of resources, while for a certain period close to the elections the politician increases or decreases investment, depending on the electoral significance of that interest group. This proves that electoral cycles not only empirically exist, but also maximize the politician’s utility from interest groups’ support. Given several interest groups, at each point in time, the politician should invest in the group that contribute the most for his or her political interests. 2002 Elsevier Science B.V. All rights reserved.