Electoral competition in the presence of identity politics

This paper studies the effects of cultural identity on electoral and policy outcomes when voters are “behavioral.†Building on the evidence that voters assess political or economic events through the lens of their partisan identifications, we analyze an election between two office-motivated candidates in which voters over-reward or under-punish the candidate that shares their cultural identity. Focusing on issues with cultural as well as distributional implications for voters such as immigration and the cultural divide based on nativism as the source of identity politics, we find that the candidates’ equilibrium policies are always preferred by the electorally dominant cultural group to the policy that would be optimal if policies only had distributional consequences. We also show that candidates do not necessarily target their own cultural bases in equilibrium. Furthermore, stronger identity politics increases policy polarization. Our findings contribute to the debates on the decoupling of voting behavior from economic interests, and the rise of immigration, trade protectionism, or engagement with global governing institutions as electoral issues that can shift historical voting patterns.