Separation of powers with ideological parties

AuthorAlvaro Forteza,Juan S. Pereyra
Date01 July 2021
Publication Date01 July 2021
Journal of Theoretical Politics
2021, Vol.33(3) 333–382
ÓThe Author(s) 2021
Article reuse guidelines:
DOI: 10.1177/09516298211017236
Separation of powers with
ideological parties
Alvaro Forteza and Juan S. Pereyra
Departamento de Economı
´a, FCS-UdelaR,Uruguay
Separation of powers with checks and balances (SP) is usually regarded as a key institution com-
plementing elections in the control of elected officials. However, some analysts and many politi-
cians also warn that excessive checks on the executive in the presence of polarization may lead
to political inaction. We analyze the interaction between elections and SP, and study under what
circumstances they complement each other. We first introduce a political agency model with
ideological parties where citizens and politicians care about rents (a valence issue) and policy (a
positional issue). Then, we analyze the impact of SPon the effectiveness of elections to discipline
and select politicians. We demonstrate that SP unambiguously raises a majority of voters’ welfare
in highly polarized non-competitive political environments, because it strengthens both discipline
and selection without causing political gridlock. SP also raises voters’ welfare if elections are very
effective at disciplining first period incumbents. Nevertheless, SP may reduce voters’ welfare if
most rents go undetected and reform is not a first-order issue.
Checks and balances; political agency; separationof powers
1. Introduction
Elected officials who are expected to act in favor of the public interest may deviate
in pursuit of their private benefit. They may do it by exerting low effort, favoring
narrow constituencies, or simply extracting rents. This confronts citizens with one
of the main challenges of democracies: reconciling delegation with control.
Corresponding author:
Juan S. Pereyra, Departamentode Economı
´a, Universidadde la Repu
´blica Uruguay, Constituyente 1502,
Montevideo 11200, Uruguay.
Modern representative democracies rely on two main institutions to deal with
the tradeoff between delegation and control: elections and separation of powers.
The early literature on political agency focused on elections as the main institution
to control elected officials (see Ashworth, 2012; Besley, 2005; Duggan and
Martinelli, 2017; Persson and Tabellini, 2000: for surveys). Later on, the literature
added separation of powers with checks and balances (SP) to the electoral account-
ability (EA) models (see, among others, Buisseret, 2016; Fox and Stephenson,
2011, 2015; Fox and Van Weelden, 2010; Persson et al., 1997, 2000; Stephenson
and Nzelibe, 2010).
The present paper contributes to this literature by providing a model of EA and
SP in the presence of ideological parties. We analyze the impact of SP on the effec-
tiveness of elections to discipline and select politicians. As we explain in the follow-
ing, ideological concerns introduce a tradeoff between positional policies and
discipline in the no separation of powers (NSP) environment. How does SP help to
manage this tradeoff? In which instances does SP complement EA? Are there situa-
tions where SP contravenes the effects of EA? How, and under which conditions,
is SP more likely to improve upon elections? These are the main questions we
address in the paper.
A crucial point of our framework is the presence of ideological parties. Indeed,
when parties (and voters) care about a positional policy issue additionally to a
valence issue (rent extraction), voters are often faced with a key dilemma. If they
want to vote down an incumbent who has proved dishonest, they must accept a
policy change they may not want. This dilemma may weaken EA if voters’ prefer-
ence for the incumbent’s policy is sufficiently strong, because in this case voters
always reelect in order to keep the policy in place (Ashworth and Bueno de
Mesquita, 2009; Besley, 2005; Eggers, 2014; Kayser and Wlezien, 2011). On the
other hand, ideological politicians may be more disciplined than opportunistic ones
because of their concern for the policy change that may be associated with losing
office (Testa, 2010, 2012; Van Weelden, 2013). We incorporate these countervailing
effects in a unified framework, and argue that SP gives voters a tool to better bal-
ance delegation and control in the presence of ideological parties. If a majority of
voters are interested in a reform, they can give the president a strong legislative
support in his first term. If the president extracts rents in the first term, voters can
remove him without changing policy by choosing a divided government for the fol-
lowing period. We show that polarization, that is, the presence of high stake posi-
tional issues on which parties strongly disagree, have potentially important and
non-trivial effects on the working of EA and SP. In particular, voters unambigu-
ously benefit from SP when there is strong polarization because the alternative
mechanism of control, the election, totally fails in this environment.
In our model, citizens and politicians care not only about rent extraction, or
more generally a valence issue, but also about an independent positional policy
issue. There are three groups of citizens. Two of them (left- and right-wing citizens)
have strong preferences but of opposite sign regarding the positional issue. The
third group (the centrists) has intermediate preferences, albeit not necessarily equi-
distant from the other two. The decisive voter belongs to the third group.
334 Journal of Theoretical Politics 33(3)
We assume there are two ideologically motivated political parties controlled by
left- and right-wing citizens. Parties’ policy preferences are publicly known. In both
parties, there are honest politicians who dislike rent extraction, and dishonest poli-
ticians who extract rents if the circumstances are appropriate. Citizens do not
directly observe whether the politicians in office are honest, but they imperfectly
observe whether politicians extracted rents. We model this imperfect observation of
rents assuming that there are ‘‘observable’’ and ‘‘unobservable’’ rents. The extrac-
tion of observable rents is revealed before elections, and of unobservable rents at
the end of the game. Thus, only ‘‘observable’’ rents play a role in signaling the
incumbent’s type. Unobservable rents are intended to capture the costs that voters
may have because of poor political selection. The higher the unobservable rents,
the greater the importance of political selection.
We represent SP as a government with two branches, the executive and the legis-
lature, elected directly by voters, so we focus on presidential systems. There is a
decision procedure that requires the participation of both branches and exploits the
opposition of interests to curb rent extraction. We assume that this mechanism
works well to impede the extraction of observable rents only if different parties
control the executive and the legislature (there is a divided government). If the same
party controls both branches (there is a unified government), the executive and the
legislature may in principle agree to extract rents.
The mechanism does not work
regarding unobservable rents: a dishonest executive can always extract these rents.
As a benchmark, we consider a scenario with only one body (the executive) that
rules in terms of policies and rents. In this environment, electionsrepresent the only
mechanism of control. We then analyze the effects of SP by introducing a second
elected body, the legislature.
SP has three main effects in our model. First, it generally strengthens checks on
the executive. This is particularly clear in the case of term limited executives in
which elections totally fail at controlling rent extraction in the last period.
However, in periods in which the president can run for reelection, SP may induce
more or less discipline so the net effect can go either way. We analyze these effects
in detail. In particular, we show that in contexts of strong polarization where elec-
tions fail at controlling rents, SP unambiguously reduces rent extraction and raises
voters’ welfare.
Second, in line with the usual concerns about the risk of political gridlock asso-
ciated to SP, we find that SP tends to reduce the ability of the executive to enact
reforms (it reduces the system’s ‘‘decisiveness,’’ to use the terminology of
McCubbins (2000)). Nevertheless, it also strengthens the system capacity to main-
tain a reform once it has been enacted (it strengthens the system ‘‘resoluteness’’ in
McCubbins’ wording). SP raises ‘‘resoluteness’’ because it delinks accountability in
the valence dimension and policy in the positional dimension. Indeed, with SP,
choosing a divided government, voters can dismiss a corrupt politician without
having to accept a switch in policy they do not desire. Therefore, voting for a
divided government, voters are using political gridlock in their favor. Thus, in our
model reduced policy activism is not necessarily negative from the point of view of
Forteza and Pereyra 335

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