According to the conventional view, in politics, just as in economic markets, competition between politicians is a force that pushes towards efficiency. We provide a model that challenges this view. In the model, candidates can promise to provide a public good or to engage in redistributive politics. We show that the more intense is competition (measured by an increase in the number of candidates) the greater the inefficiency. This is because the tendency to focus on policies that provide particularistic benefits increases with the number of candidates at the expense of policies that benefit the population at large.

We also examine the impact of voters’ ideology, participation, and information on the efficiency of the electoral process, by allowing for heterogeneity in voters’ responsiveness to electoral promises. The larger the fraction of non-responsive voters, the less efficient the political process. This is because electoral competition focuses on swing voters, increasing the value of policies with targetable benefits.