Intra-Party Discipline, Rent Extraction and Electoral Rules¤ Benoit S Y Crutzeny This Draft: March 2004 Abstract This paper analyzes how intra-party competition a®ects rent extraction. We show that the career-concern motives that in°uence rent extraction by individual politicians are sensitive to intra-party discipline. Compared to majority rule, proportional rep- resentation o®ers parties a broader range of devices to discipline politicians, thanks to its electoral lists. The active use of these lists by the party is proven to yield out- comes that increase the electorate's welfare under proportional representation relative to majority rule. These results also o®er a new interpretation of the available empiri- cal evidence. Keywords: Party Discipline; Rents; Electoral rules JEL classi¯cation: D72, H41 ¤I am indebted to Micael Castanheira, Catherine Dehon, Estelle Malavolti, Abdoul Noury and Nicolas Sahuguet for their insightful suggestions and their time during the preparation of this draft. Many thanks too to seminar participants at ECARES. yCorrespondence address: ECARES { C.P. 114, Universit¶e Libre de Bruxelles, 50 F D Roosevelt Ave, B-1050 Brussels, Belgium. Tel: +32-2-650.33.75; fax: +32-2-650.40.12; email:
[email protected] 1 "When it comes to electoral rules, the devil is in the details". (Persson and Tabellini, 2004: 15) 1 Introduction Elected o±cials have plenty of opportunities to abuse their positions. Once in o±ce, incumbents can easily extract rents from the budget they control. This may go against the interest of the electorate, because resource diversion decreases their welfare. And it may also go against the interests of the incumbents' own party, because its objectives may not coincide totally with those of its politicians.