Rent Seeking and the Size of Parliamentary Majorities

This chapter presents a model in which the party that loses the general elections can still try to capture the majority in Parliament by convincing members of the majority faction to switch sides. These attempts are not successful in equilibrium. Nonetheless, the results of the general elections are partly determined by this additional stage of political conflict. Larger majorities are shown to lead to lower rent payments and some voters therefore face a trade-off between lowering rent payments by supporting the party that wins the elections or supporting their preferred party. Multiple equilibria in the general elections with either party winning are possible. Moreover, the size of the equilibrium majority is larger than when no bribes after the elections are possible.