Institutions and Political Restraint

Recent political developments worldwide have focused attention on the fraying of political norms, often understood as informal restraints on opportunistic behavior. We present a model to study how norms of restraint interact with institutional checks and balances. In the model, an election determines which party holds office in each period over an infinite horizon. Each period presents the majority party with an opportunity to modify a status quo policy. However, informal norms and formal institutional barriers limit its ability to do so by providing soft and hard constraints to policymaking, respectively. We show that political cooperation can be easier to sustain in political systems with fewer checks and balances, when political norms are sufficiently stringent. Under optimal norms, increasing polarization makes norms easier to uphold, while also reducing welfare. Finally, norms maintained by minority parties are less sustainable, and voter optimal norms require minority concessions to achieve greater electoral competitiveness.