Separation of Powers with Political Polarization

Abstract:

Separation of powers with checks and balances (SP) is usually regarded as a key institution complementing elections in the control of elected officials. However, some analysts and many politicians also warn that excessive checks on the executive in the presence of polarization may lead to political inaction. We present a political agency model with ideological parties where citizens and politicians care about rents (the valence issue) and policy (a positional issue). We first consider a framework only with electoral accountability, and show that under political polarization elections completely fail at disciplining and selecting politicians. Then, we add SP and demonstrate that voters unambiguously benefit because discipline and selection are partially recovered, and voters can choose a unified government to facilitate reform.