Commitment Problems and Democratization

question 37

Multiple Choice

Commitment Problems and Democratization
In a paper entitled, "Commitment Problems in Emerging Democracies: The Case of Religious Parties," Stathis Kalyvas (2000) examines whether religious parties are compatible with secular and liberal democratic institutions. He concludes that religious parties may be compatible with democracy so long as they can credibly commit not to impose a theocratic dictatorship if they come to power. He goes on to argue that some religions are better able to provide these credible commitments than others. We now provide a Religious Party Game that throws light on the credible commitment problem facing religious parties that Kalyvas describes.
The two players in our game are a dictatorial regime (Regime: that has recently introduced a process of democratization and a religious party [Religious Party] that seeks to gain power through the newly proposed democratic elections) . The Religious Party is expected to win the elections and many fear that it will turn the country into a theocracy rather than continuing the process of democratic consolidation. The Regime has to decide whether to hold the elections as scheduled or to cancel them and retain power as a dictatorship. If elections are held and the Religious Party wins (which we are assuming will happen) , then the Religious Party has to decide whether to pursue a moderate political agenda and support democratic consolidation or to subvert the democratization process and create a religious regime. The Religious Party comes in two types-moderate and radical. One way to think about these types is that religious parties have both moderate and radical factions; whichever faction is dominant determines the Religious Party's type. Moderate religious parties prefer democratic consolidation to establishing a theocracy, whereas radical religious parties prefer the opposite.
There are three possible outcomes in this game: Continued Dictatorship, Religious Dictatorship, and Democratic Consolidation. Figure 3 illustrates an incomplete information version of this game with cardinal payoffs in which the Regime does not know whether they are interacting with a moderate Religious Party or a radical Religious Party. Now answer the following questions.
Figure 3: Radical Religious Party Game

-Solve the subgame on the left, where the Religious Party is moderate, as if there were no uncertainty. What is the subgame perfect Nash equilibrium? Note: write the equilibrium in the form (Regime's move; Moderate party's move) .

• A) Cancel elections; Pursue radical policy
• B) Hold elections; Pursue moderate policy
• C) Hold elections; Pursue radical policy
• D) Cancel elections; Pursue moderate policy

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