Gridlock, Leverage, and Policy Bundling
Barton E. Lee, UNSW
Abstract: We consider a dynamic model of bargaining where alternatives to the status-quo arrive stochastically during the bargaining process, the agenda-setter can bundle multiple alternatives into a single proposal, and a forward-looking voter elects the agenda-setter. We show that the conventional wisdom that policy bundling reduces gridlock — by facilitating compromise across different policy areas — is incomplete; policy bundling can also increase gridlock. A player may veto an alternative that is unanimously preferred to the status-quo so that in the future she can bundle this same alternative with a contentious alternative that otherwise would not pass. This perverse incentive creates an additional source of gridlock and, in equilibrium, we show that gridlock occurs in excess. This state of “excess gridlock” is driven by the voter being forward-looking and lacking commitment power to punish vetoers.