CeDEx workshop - Torun Dewan (London School of Economics)

Good Leaders and their Associates

Abstract. Members of a group value informed decisions and hold ideological preferences. A leader is granted authority to take a decision on their behalf. Good leadership depends on characteristics of moderation and judgement. The latter emerges endogenously via the advice that is communicated by members to the leader. Trustworthy advice requires ideological proximity to the leader. An implication is that the group may chose a relatively extreme leader with a large number of trustworthy allies. Paradoxically, this may happen even when it is in the group's collective interest to choose a more moderate one. We develop our analysis further in the context of two-party competition where each party chooses a leader who implements her preferred policy if elected. Then a party may choose an extreme leader who defeats a moderate one chosen by the opposing party. Our results highlight the importance of party cohesion and the relations between a leader and her party. We show that these can be more important to securing electoral victory than proximity of a leader's position to the median voter.