What is opposition good for?

Abstract

Governments in representative democracies may have incentives to pursue policies that do not align with voters’ preferences. When voters lack information about the policy bias of the government and the consequences of policy alternatives, they will have difficulty holding the government accountable. I propose a formal model that explores whether an opposition party can help solve this problem by providing information about policy alternatives. The model acknowledges that opposition parties may have incentives to mislead voters because of their own policy biases or election concerns. Despite this challenge, the model shows that the presence of an opposition party may induce a biased government to adjust its policies. For this disciplining equilibrium to work, the reputations of the opposition and the government should be close to each other, or the voter should believe that one policy alternative is much more likely to be good for her than another alternative. In addition, the government should be sufficiently concerned about winning the elections, and the opposition should be sufficiently concerned about policy. Under the same conditions, however, misleading information on the opposition may cause an unbiased government to implement policies that are detrimental to voter welfare.