Electoral Competition, Political Uncertainty and Policy Insulation

Scholars argue that electoral uncertainty is a crucial factor that influences policy implementation: current holders of public authority, nervous that they might lose their position, seek to insulate the agencies they create so that policies will survive their creators. These theories, however, ignore crucial variation in the electoral prospects of groups competing for public authority. In this paper, I examine the effect of electoral volatility on the degree to which groups in power will dismantle their opponent's agencies and programs and insulate their own policies from such destructive behavior. Through the analysis of two repeated games, I derive four propositions which fully characterize the conditions under which cooperative behavior can provide stability in the face of electoral uncertainty and instability. First, I show that if gains from cooperation are sufficiently large, compromise and cooperation can occur in the face of uncertainty. Second, I show that electoral uncertainty increases the possibility of cooperation, a result counter to the informal literature. Third, when electoral uncertainty is low, only one group—that with a low probability of electoral success—will insulate their programs. Finally, as electoral uncertainty increases, a wider set of the parameter values support the extreme cases of either both insulating or not insulating. I conclude by discussing some implications, examples and potential further extensions of the models