Working Paper: CEPR ID: DP10323
Authors: Massimo Bordignon; Tommaso Nannicini; Guido Tabellini
Abstract: We compare single round vs runoff elections under plurality rule, allowing for partly endogenous party formation. Under runoff elections, the number of political candidates is larger, but the influence of extremist voters on equilibrium policy and hence policy volatility is smaller, because the bargaining power of the political extremes is reduced compared to single round elections. The predictions on the number of candidates and on policy volatility are confirmed by evidence from a regression discontinuity design in Italy, where cities above 15,000 inhabitants elect the mayor with a runoff system, while those below hold single round elections.
Keywords: electoral rules; policy volatility; regression discontinuity design
JEL Codes: C14; D72; H72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Runoff elections (D72) | Less likelihood of extremist parties merging with moderate ones (D79) |
| Runoff elections (D72) | Greater number of political candidates (D72) |
| Runoff elections (D72) | Less policy volatility (G18) |