Moderation of an ideological party

It is a common fear in many countries that ideological parties will come to power through elections but will implement extreme policies and even end the democratic regime. Many countries cope with this problem by overriding the election results when such parties are elected. In a two-period model, we demonstrate that alternative approach of containing these parties within the democratic system is more effective. In equilibrium, if an ideological party (IP) comes to power in the first period, depending on its type (i.e., its extremity), it either reveals its type or chooses a moderate policy in order to be elected again. We show that, as the probability of state intervention in the next elections increases, IP policies become more extreme: fewer types choose to moderate and when they do, they moderate less. This hurts the median voter. It also remains true when the probability of intervention depends on IP policy. We further show that from the median voter's perspective, the optimal intervention scheme can be implemented by committing not to intervene and adjusting election times appropriately. That is, elections are a better incentive mechanism than the threat of a coup. Our results are extended to a model in which an IP can try a coup. Keywords: Coup, Moderation, Democracy, Ideological Party.