This paper presents a two-party model in which partisan and opportunistic politicians have two options: (i) to reach an agreement with respect to the central banker before elections are held, which leads to elections becoming a toss up, or (ii) to let the citizens vote for their proposed central...

This paper surveys the literature on the most fundamental institution in a democracy: the appointment of the policymakers through democratic elections. Elections perform at least three different functions: (i) to discipline the elected officials by the threat of not being reappointed; (ii) to...

This paper presents a political economy model in which the voters want to control moral hazard on the part of the incumbent and select a competent candidate to be in office. We focus on elections which take place repeatedly as the basic disciplinary and screening mechanism. It is shown that...