Economics and Finance seminar: Antoine Loeper (Universidad Carlos III de Madrid)

A case for divided government (joint with Wiola Dziuda)

American voters complain about gridlock under divided government, yet they often elect it. We reconcile these facts with a model built on two realistic features: voters are uncertain which reforms they will find beneficial once the election has passed, and governments face an agenda constraint—they cannot address every worthwhile reform. Together these generate a preference for divided governments that does not rely on compromise between parties. Instead, a divided government offers the most adequate response to circumstances that arise after the election. However, since the voter chooses the government before knowing what policies she prefers, policymaking remains imperfect from the voter’s standpoint.
Divided government sometimes produces gridlock, implementing no reform even when one would have helped the voter, and sometimes prioritizes the less pressing reform. In a dynamic extension, the anticipation of a divided government polarizes the parties—but less than if voters could elect only unified governments. Our paper thus uncovers a novel benefit of checks and balances: electing divided governments not only minimizes the inefficiencies of delegating to polarized parties, but reduces polarization in the first place.

⏱️Thursday, October 1, 2026, from 12:00 to 1:15 p.m.

📍Room A406