Economic and Political Competition

• Economic and political competition have similarities and differences.
• Political competition is the result of translating individual preferences into collective choices.
• Theories in political analysis rely on models of competition
  • Drivers motivate actors to compete.
  • Structure shapes how competition functions.
• Competition distinguishes democratic from non-democratic governments
  • Democracy includes free competition for votes.
  • Competition exists for government positions.
  • Fair elections occur regularly without force.
  • Citizens participate in selecting leaders and forming policies.
  • Civil and political liberties ensure integrity.
• Models of political competition use analogies with economic competition.
• Competition is necessary, but not enough to determine if a regime is democratic.
• Political competition is understood using standard economic theory.

Economic Competition

• Competition is the extent that a firm can influence price.
• High competition occurs when influence is close to zero.
• Competition eliminates profits and price discrimination.
• A competitive industry produces outputs with minimal resources.
• Strong competition correlates with more rivals and similar sizes.
• Higher competition happens in longer periods with new rivals entering.
• Standard economic theory applied to political analysis raises challenges
  • Important differences exist between party competition and economic competition.

Economic vs Political Competition

• Stigler identified differences between economic and political competition.
• Political products are mutually exclusive, but economic products arent coercive.
• Coercion is stronger in politics.
• Policies are mutually exclusive; economic goods arent.
• Every patron receives a product in business, which is under covenant in the absence of error or fraud.
• Voters might not receive representation or achieve promised policies
• Some are likely to receive nothing from votes if their party isn't elected
  • This means expenditure isn't associated with expected outcomes.
• The more parties there are, the less likely any party will achieve its platform
  • Coalition governments struggle to adopt policies departing from the status quo
• More competition on political markets is often more detrimental to consumer welfare than on standard good markets
• Many efforts exist to adapt economists' conceptions to political competition
• Early applications study local government and spatial competition.
• Monopolistic competition models demonstrate voter preference for a party based on location.

Downsian Model

• Based on a rational-choice model of oligopolistic behavior.
• Portrays competition where candidates seek power
  • Candidates enjoy power, but policy is a tool for opportunism
• Candidates only want election; voters care about policies regardless
• Parties adjust positions to evolving voter preferences.
• Model uses a pure demand side of politics, parties adjust to voters' preferences.
  • This is in contrast to a supply conception where parties shape voter demands.
• The model shows that if voters distribute symmetrically along the left-right axis, then the median voter position minimizes the aggregate policy distance.
• In a two-party system with complete information, parties will converge to median voter position.
• Moderate left/right because extreme positions have small chances.
• The stronger adherence to a party means the more extreme the positions.
• Most people don't have strong opinions or deeply care about some issues.
• Parties do not have direct access the median voter.
• The Downsian model relates to properties of electoral competition.
• Electoral representation efficiency is maximized when both parties converge to median.
  • This ensures moderate governments.
• Harder competition for votes reduces opportunities for leaders to pursue own interests

Party Convergence

• Party convergence implies policy continuity
• Only changes governments bring about in voter preferences would cause policy differences
• This is just one way of modeling competition in a democracy

'Minimal' Conception of Democracy (Schumpeter)

• Schumpeter views the 'democratic method’ as an institutional arrangement.

  • This leads to political decisions arrived through a competitive struggle

• Voters choose the elite - parties do not respond to people’s preferences.

• The competitive-elitist perspective says that there is no active role for the electorate because it lacks information and cares little.

• The elite tries to pursue reelection policies and those unrelated to voter preferences.

• Machine politicians rise because voters can only stampede; they regulate political competition like trade associations.

• No mechanism exists to translate individual preferences into a general interest.

• Interest group politics is separate from self-interest politics

• Arrow's impossibility theorem demonstrates Condorcet's paradox

• Aggregating individual preferences is impossible

Condorcet Paradox

• Condorcet Paradox, or Condorcet cycle, occurs when no candidate is preferred by at least as many voters as all other candidates when looked at via pairwise matchups

• No matter who you pick, someone else is more preferable in the set.

• All cycles end up in the Smith set.

• Marquis de Condorcet noted that collective preferences can be cyclic, even if individual preferences aren't.

• Majority wishes can conflict, resulting in multiple warring factions.

• Majority rule represents one way to aggregate preferences

• Pluralism aims to find compromises among various clusters.

• Pluralism works to consolidate and seek compromises among various preference clusters (i.e. organized interests)

  • Includes those of the minority
  • This is for a more inclusive decision-making process.

• The U.S. political system is often viewed as a pluralist democracy.

• Aggregating diverse preference clusters is also a defining feature of Europe's corporatist political economies.

• Collective rationality validates public decisions resolving problems with broad consensus

• Decisions rely on overall societal goals as understood by independent, unelected experts.

Non-democratic Settings

• Important for government positions in a democracy
• Competition is central in a democracy.
• Competition exists under authoritarian rule, organized under different principles.
• Revenue growth increases the probability of promotion of county chief executives in mainland China.
• One-party dominance does not prevent competition among sectors and levels of government
• Political competition among promotion-seeking local officials in China increases taxation where competition is intense
• Market exchanges aren't universally ideal and apply to political competition

Political Regimes

• A political regime is the formal and informal structure and nature of political power in a country.
• A political regime designates the distribution of political powers in society
• Regime ≠ System - Regime > Government - Regime < (approximately) State
• Regime type might not be affected by the policies in a given country
• Regime changes now seen as slow processes.
• Political regimes trace back to the Ancient Greeks
• Montesquieu distinguishes between 'limited' and 'despotic' regimes.
• Kelsen distinguishes between 'autonomy' and 'heteronomy' systems.
• Schumpeter emphasizes 'contestation' as the essential feature of democracy.

Modes of Classification

• Classifications start with a split between democratic and non-democratic regimes.
• A regime is democratic with competitive elections, universal suffrage, and government accountability.
• Without these 3 aspects, a regime can be considered autocratic
• Distinction are insufficient to qualify a regime as democratic.
• There needs to be a distinction between electoral democracies and liberal democracies.

Types of Democracies

• Liberal democracies guarantee civil liberties, rule of law, and accountability between officials and other bodies.
• Electoral democracies only have the procedural features of democracy
• Autocratic regimes are diverse.
• Parliamentary regimes shifted from the king's budget to the people's budget.
• Sultanistic regimes focus on the aspect of the king's budget.
• In sultanistic cases, you can have a sort of legal-rational domination as opposed to traditional legitimation.
• Traditional regimes focuses less on the number of years for the family, and more how it legitimizes itself.
• Patron-client ties offer accountability through reward and mutual favor.
• Contemporary classifications of political regimes rely on a continuum.
• Suitable typology can indicate when regimes are in transition to democracy or authoritarianism.

Types of Regimes

• Ambiguous regimes refer to post-communist countries gradually transitioning to democracy.
• In Hungary, the procedural features are in place but the party in power is manipulating electoral rules.
• Russia during the late 1990s transitioned from authoritarian rule, but suddenly shifted after Putin arrived.
• Competitive authoritarian regimes provide factual competition and regular elections.
• Competitive authoritarian regimes still come with the underlying knowledge that it is an authoritarian regime (biased)
• Other regimes include electoral, uncompetitive and politically closed regimes.
• Singapore features of a liberal autocracy.
• The term ‘illiberal democracy' can also be used

Global Assessments

• Several global assessments measure democracy quantitatively

• Freedom House Rating includes many things from political expression to personal autonomy

• Polity measures political participation and executive recruitment

• There are many limitations in the measuremnt of conceptualization

• Methodological limitation

• Hard to quantify

• There is a merging dynamism.

• Political regime is the (in)formal structures and nature of power in a country.

• The extent of elections factor in regime classification

• There are many limitations to the processes of assessment