Political parties as a commitment technology: Effects of term limits on vote share Middle Tennessee State University Jason M. DeBacker ∗ Submitted February 2009; accepted February 2012 Building on models of electoral competition with reputational mechanisms, I show that term limits decrease the vote share of candidates from parties less able to reward or punish candidates. Candidates suffer by not being able to credibly commit to policies far from their own preferences. Assuming that the major parties can provide better discipline of their members than third parties, the implication of the model is that third party candidates will be worse off, in terms of vote share garnered, in elections for offices with term limits. The hypothesis that third parties do worse under term limits is tested using state gubernatorial elections. Data from 1977-2008 show the vote share of third party candidates is approximately six percent lower in elections for a term-limited office when controlling for other election characteristics and regional and temporal trends in party popularity. JEL Classifications: C23; C73; D72 Keywords: Time Consistency; Political Parties; Commitment; Term Limits I. Introduction Although political parties are a constant in democracies, they are often absent from models of political- economy. Theoretically and empirically there has been trouble supporting a useful role for political parties. When incorporated into models, political parties most often exist to increase voter turnout, choose political candidates, or to select policy platforms. In the following paper, I intend to provide support for the last of these roles. Like Levy (2004), I will show that political parties exist to increase the commitment ability of politicians. The way parties accomplish this, however, will differ from Levy’s hypothesis. In the fol- lowing model, parties will act as a commitment technology for politicians, even if the policy space is one dimensional, through repeated interaction with the politicians that make up the party. Specifically, I will test the hypothesis that political parties play a role in solving the time consistency problems associated with the electoral game. I construct a model similar to Alesina (1988a) and Alesina ∗ I would like to thank Rob Williams, Don Fullerton, Dan Slesnick, Brian E. Roberts, and Thomas Wiseman for advice and guidance. This paper also benefitted greatly from comments by public economics seminar participants at the University of Texas. All errors are my own. Correspondence: Department of Economics and Finance, Middle Tennessee State University, PO Box 27, Murfreesboro, TN 32132. Email: jason.debacker@gmail.com 1