Labor Seminars Amsterdam

Speaker(s)
Holger Sieg (University of Pennsylvania, United States)
Date
Tuesday, 13 May 2014
Location
Amsterdam
Link

We estimate a dynamic game of gubernatorial elections to provide a new empirical evaluation of the impact of term limits on electoral competition and economic policies in the U.S. Building on recent theoretical advances in modeling repeated elections, we consider a model in which candidates from two parties compete in statewide elections. Politician cannot credibly commit to policies prior to an election. Candidates are drawn from different distributions of ideological positions, which share a large common support. Equilibria can be characterized by asymmetric election standards, which depend on the party of the candidate and the history of the game. We show that our model is non-parametrically identified and propose a semi-parametric estimator. The empirical analysis draws on data from U.S. gubernatorial elections between 1950 and 2012. Our findings suggest that term limits provide strong incentives for a moderate governors to move towards the center of the ideological spectrum during his first term in office. We also find evidence that the distribution of voter ideal points is similar to the distribution of political candidates providing support for citizen-candidate type models. Joint with Chamna Yoon.