Bending the Iron Law: The distribution of power within political parties

Abstract How do political parties share power internally? We study the internal organization of political parties as the solution of a moral hazard problem between a party conference and its factions. Factions' mobilization efforts benefit the party electorally, but can only be imperfectly monitored. In contrast with the logic of Michel's Iron Law, we provide a functionalist rationale for intraparty power sharing: We show that internal power sharing can enhance a party's electoral performance. This effect is stronger in settings that award more resources to election winners: Low interparty power sharing produces high intraparty power sharing. We also show that intraparty power sharing should be more frequent within smaller parties, when monitoring of factional effort is more precise (e.g., preferential voting systems), and when factions' ideological disagreements span multiple dimensions.