In this chapter, we continue to consider environments with multiple policymakers, though the emphasis is different from that in Chapter 4. Rather than assuming that the agreement of all actors is necessary to change policy, the models here mostly assume a single principal, which may either act on its own or delegate policy authority to an agent. In political science, the principal is typically a legislature, whereas the agent is often a bureaucratic agency of the executive branch.

The models in the previous two chapters assume that voting in elections is the only avenue by which citizens may influence policy. Groups of individuals who have overcome their collective-action problems, however, may have other opportunities to exert influence. In this chapter, we examine various models of special interest politics, taking the organization of those interests as given. We first consider a model of pure campaign finance, where campaign spending is the only choice variable. We then explore the interaction between campaign finance and policy choice in a model of electoral competition. Both models simply assume that campaign spending influences voter behavior; we unpack this assumption in a model of informative advertising. We then move to an environment in which organized groups bargain with public officials over policy. We conclude by considering competition for influence in a lobbying model with several organized groups.

In this chapter we examine electoral competition under various forms of uncertainty. The models here depart from those in the previous chapter in assuming that voters behave stochastically—in how they cast their vote, or even in whether they vote at all. As we will see, the incorporation of stochastic voting behavior can resolve many of the issues associated with the models in the previous chapter, including nonexistence of equilibrium and full convergence of campaign platforms in equilibrium.

In previous chapters, we have largely pushed collective action and institutional change to the background. In this chapter we explore the ability of citizens to force a regime change through coordinated action. We also consider the possibility that political elites respond to the threat of collective action by changing institutions on their own.

We begin our study of formal models of domestic politics with elections. This chapter explores electoral competition when voting behavior is deterministic; the following chapter considers electoral competition under uncertainty.

Formal models of electoral competition provide a lens through which to examine the positioning of candidates in democratic elections. Consider, for example, the onetime assertion that there is little substantive difference in the platforms of the United States’ two major political parties (e.g., American Political Science Association, 1950). The economist Harold Hotelling was the first to offer a theoretical explanation for such behavior (Hotelling, 1929). Parties, Hotelling argued, choose positions along a left–right continuum (an example of a policy space), much as gas stations or drug stores choose a location along Main Street. When there are two parties, the logic of political competition compels each to adopt a position in the center of the ideological spectrum, just as we often observe gas stations located across the street from each other in the center of town. Anthony Downs popularized and extended Hotelling’s argument in An Economic Theory of Democracy (Downs, 1957).

In previous chapters, we have either considered models of democratic politics or, as with theories of lobbying or veto players, models that can be interpreted as applying to diverse institutional settings. In this chapter, we turn to authoritarian politics.

Many of the models we have considered in previous chapters focus implicitly on the construction of coalitions in support of particular policies. In models of electoral competition, for example, parties or candidates seek the support of majority coalitions among the electorate. In contrast, in models of veto players, an agenda setter endeavors to assemble a unanimity coalition among political actors with the power to block change from the status quo.

In this chapter we return to electoral competition, but we shift focus from elections as a mechanism for aggregating individual preferences to elections as a means of holding officeholders accountable to voters. The literature on political agency that we survey here has its roots in the economic theory of contracts, where the central question is how contracts govern the relationship between principals (e.g., employers or shareholders) and their agents (e.g., employees or CEOs). In models of political agency, voters play the role of principals; their agent is a politician elected to govern on their behalf.

All of the models we have considered so far implicitly assume a single policy-maker. However, in many political environments policy can be changed only with the agreement of multiple actors. Such actors—those with the ability to block any change from the status quo—are known as veto players. Veto players might derive their power from a country’s constitution, as when the constitution dictates that policy cannot be changed without the agreement of the parliament and the president. Alternatively, they might arise endogenously through the political process. Parties that join a governing coalition, for example, typically acquire a veto over policy change.