Information, polarization and accountability in democracy

April 2004 This paper considers a society with uni-dimensional politics and voters with poor information about the economy. It compares three institutions: direct democracy, representative democracy, with short and long term lengths, respectively. Low uncertainty about the econ-omy and high polarization of political parties make direct democ-racy optimal, otherwise representative democracy is best. Short term lengths make parties accountable and give voters the option to replace a party, which is good, but also make parties distort policy in order to win elections, which is bad. For high uncertainty and low polarization, the trade off favors of short term lengths, otherwise long