Choosing Your Pond: A Structural Model of Power Sharing

Abstract

I develop a model of party formation in which politicians share their political rents with party leaders in exchange for accessing parties’ club goods. Bigger parties provide greater club goods but tax politicians’ rents more upon entry. Therefore, politicians with more assets prefer smaller parties. I estimate my model for Turkey with a dataset of all listed politicians between 1995 and 2014. I find that the right-wing parties accumulate club goods more easily than they produce rents, which leads to ever stronger party control. Counterfactual exercises provide a novel explanation for the differences in party-size distributions across political systems.