Electoral competition and the party politics of public investments

Abstract

When do political parties propose long-term investments? Electoral competitiveness should be a key variable explaining parties’ investment priorities: parties can be less responsive to voters’ short-term priorities and overcome time inconsistencies when they are more likely to win the next election. The article distinguishes the characteristics of three types of investments in education, environmental protection and technology and infrastructure, gathered from the Comparative Manifesto Project. It finds a linear positive relationship between parties’ probability of entering office and the proportion of manifestoes allocated to statements about technology and infrastructure. In contrast, statements about education are highest at high levels of electoral competitiveness, as parties propose more education to attract voters, while statements about the environment are affected by parties’ ideology on the left-right axis rather than by electoral competitiveness. Power-sharing institutions help parties to overcome time inconsistency problems, reducing the impact of electoral competition on investments.