Who emerges from smoke-filled rooms? Political parties and candidate selection

This paper presents a model of candidate selection through political parties where politicians differ in terms of their quality and their favored policies. The central assumption is that political parties are better informed about their potential candidates than voters are. Questions of interest include whether voters can gain information about candidates by observing the party's choice and to what extent parties select the candidates preferred by the median voter. The results depend crucially on how competitive the race is. Under strong competition, nominating a politically more extreme politician is a signal of high quality. Sufficient competition also induces parties to act in the interest of the median voter most of the time, even when parties attach very little intrinsic value to quality. As ideological alignment between the median voter and a party reduces the degree of competition that this party faces, the median voter can be better off when parties are polarized