Economics of majoritarian identity politics

Abstract

Majoritarian identity politics has become salient in representative democracies. Why do parties engage in identity politics, and what are its consequences? We present a model of electoral competition in which parties capture voter groups based on their identity, and compete over an economic policy platform for the support of non-partisan voters. In addition, the party that caters to majoritarian interests makes a costly investment in polarizing identity. The investment provides subsequent payoffs to voters who have a preference for identity. When voter preferences over policy platforms are idiosyncratic in nature, greater investment in polarizing identity (i) increases both parties’ rents from office; and (ii) marginalizes minority voter interests. Further, the majoritarian party substitutes away from economic policy platforms. This enhances its overall payoffs in equilibrium and decreases that of the opposition party. We discuss the implications in the context of episodes of majoritarian identity politics in India, Turkey, Brazil, and the United States.