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Journal of Law, Economics, and Organization Advance Access published online on August 11, 2009
Journal of Law, Economics, and Organization, doi:10.1093/jleo/ewp019
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© The Author 2009. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Party Organization and Electoral Competition

Benoît S. Y. Crutzen*

Erasmus University Rotterdam

Micael Castanheira**

Free University of Brussels

Nicolas Sahuguet***

HEC Montréal

* Department of Economics, Erasmus School of Economics, Erasmus University Rotterdam, Rotterdam, The Netherlands. Email: crutzen{at}ese.eur.nl.

** ECARES, Free University of Brussels, FNRS and CEPR. Email: mcasta{at}ulb.ac.be.

*** Institut d'Economie Appliquée, HEC Montréal, CIRPEE and CEPR. Email: nicolas. sahuguet{at}hec.ca.

We propose a model in which two parties select the internal organization that helps them win the election. Party choices provide incentives to the politicians who represent them. Depending on whether politicians are opportunistic or partisan, we identify four effects. First, a selection effect: intraparty competition gives parties more candidates to choose from. Second, an incentive effect: intraparty competition adds a hurdle and impacts on candidates' incentives. Third, a trust effect: because of the incentive effect, intraparty competition is a signal to uninformed voters. Finally, with partisan preferences, an ideology effect appears. Ideology is a public good in a competitive party and induces free riding. Intraparty competition is valuable when voters are badly informed or intraparty competition is weak. These results rationalize the introduction of direct primaries in the United States, the organizational changes in Western European parties since 1960, and the organizational differences between centrist and extreme parties. (JEL D23, D72, D81)


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