Q&A: New Assistant Professor Álvaro Delgado-Vega discusses political parties, interest group loyalty, and democratic backsliding

Why is loyalty so important in politics? How do the relationships between political parties and interest groups affect our public policies? Álvaro Delgado-Vega, who recently joined the Harris School of Public Policy at the University of Chicago as an assistant professor, studies these kinds of questions.

A political economist, he focuses on the nature of political parties and how they interact with interest groups and others across the political landscape. His research uses tools of applied game theory to examine topics such as the complexities of political agreements, reputation-building in corrupt environments, or democratic backsliding.

He earned his Ph.D. in Economics from the Universidad Carlos III de Madrid, where he was recognized with an Outstanding Doctoral Award. Prior to joining the Harris faculty ranks, he served as a Postdoctoral Fellow at ETH Zürich, in the Department of Management, Technology, and Economics.

We recently sat down with him to learn more about his work.

Can you tell us about your research?

I use game theory to study questions of political economy, most notably the relationships between political actors (political parties, interest groups, etc.) and how they evolve over time. I study how these relationships endure – or don’t -- through shifts in power dynamics.  These changes include events such as when government leadership changes or there are shifts among activist groups, lobbies, industrial concerns, or other political actors. And I'm very interested in how these relationships survive this current moment of disruption and upheaval in the political arenas around the globe.

Let me give you an example of the kinds of things that fascinate me. Consider, for instance, a scenario where a firm, with certain policy preferences, associates with a senator. As you might expect, the firm’s benefits from that relationship fluctuate over time with changes in congressional majorities, political circumstances, or how secure the senator’s seat is. All these factors—not to mention the senator’s relative power—affect that firm’s influence at each moment in time. There are times when one side in the relationship holds more influence than the other, or when the senator has a greater ability to provide favors to the firm.

A related topic is the relationships between political parties. We could say that politics is based largely on the competition between parties. But, hard as it might be to believe, politics is equally based on some non-written agreements between parties. When we watch the news, we often see politicians fiercely disagreeing, calling the other side names, and avoiding compromise with other parties at all costs. However, beneath the surface, there are often underlying agreements that shape the political landscape. I’m intrigued by these non-written agreements that form behind the daily political spectacle and the obvious signs of rancor, extreme partisanship, and conflict.

So how and why are political agreements upheld, especially for long periods of time?

To answer this question, my research borrows a notion from organization economics, which is that of “relational contracts”. The concept of “relational contracts” posits that we operate not in an environment where we can simply sign legally binding contracts that are explicitly outlined and enforced by a judge. Rather, we establish relationships that function much like contracts but rely solely on the understanding that if one party behaves improperly or fails to fulfill agreed-upon obligations, there will be consequences.

So basically, there's always the threat that if you break your promises today, you will be punished tomorrow. I apply this thinking to political relationships. The reason a politician or party keeps their promises to an interest group is, to use one example, because that interest group will support them in return with public endorsements or campaign contributions. It's possible, however, that once in power, the politician could decide to break those promises because they no longer need the group’s support. However, that decision has to be balanced against future considerations—e.g., “If I break my promises now, you probably won't support me in the next election.” These considerations sustain political relationships. Political actors build relationships across time, but if one side misbehaves and breaks a promise, it risks losing the benefits of future interactions. Thus, the word of the day is often—"I don't want to sever ties with you; rather, I aim to maintain our friendship.”

How do interest groups decide whether to maintain long-term loyalty to a political party?

This is of course, a complex question in which a lot of factors play an important role and my research only tackles a small part of them. The key question here for me is whether interest groups have long-term loyalties to one political party or whether we really see opportunism, in which interest groups start by aligning with today’s incumbent and then switch their support to whoever holds power tomorrow.

My paper “Which Side are You on? Interest Groups and Relational Contracts” shows that these questions of loyalty depend on how political parties have the ability to transfer resources and benefits to favored interest groups.  I’ve learned the answer may vary a lot by industry. For instance, some industries and individual firms might want to receive large resource transfers, while others may only desire smaller favors from politicians at regular intervals. I find that in the first scenario, larger resource transfers to certain groups in short periods, does indeed tend to foster long-term loyalty.

Take the construction sector, for instance. It often sees large sums of money transferred quickly due to numerous contracts and building projects decided within short timeframes. As a result, these firms and their interest groups often tend to be quite loyal. On the other hand, a company or an industry needing minor regulatory favors, which only change slightly each year, is more likely to shift between incumbents, showing less loyalty and more opportunism. At least these are the predictions of my theory, and it seems to be also what we conclude from some anecdotal evidence. There is still need for further research on this—both theoretical and empirical. 

How do established parties respond to the emergence of a radical party?

This is a question that my coauthor Johannes Schneider and I address in a paper we called, maybe in a slightly provocative way, "Embracing the Enemy".

 The paper explores relational contracts between parties. Let’s say in a two-party system that one third party emerges as a radical alternative—either extreme left or extreme right— disrupting the existing order. We examine how the other two parties, the established parties, which are closer ideologically, respond to this "enemy" party. We discover that they go through two phases: initially, they set up a "cordon sanitaire" where the established parties collaborate to isolate this radical newcomer and prevent it from gaining office. That term usually refers to a line used to restrict movement in times of infectious diseases—and in this case, the infectious disease is the more radical party.

However, if efforts to exclude this party fail and it eventually wins enough votes to form a government, everything changes. The cordon sanitaire then breaks up permanently. Therefore, this paper predicts that these barriers to an outsider party having influence will persist until they fail for the first time, but once it does, the cordon sanitaire is gone for good.

Why does this happen? Because once these radical newcomers have gained a seat at the table, once they have the power to decide policies today, there is an urgent need to moderate them. What the established parties gain out of this is the (partial) moderation of the radical party. The cost, of course, is that the attempt to exclude them from power is over.  It is not surprising that some form of catering to the views of these newcomers will eventually occur. But our paper makes a stronger prediction: when these new radical newcomers eventually do gain enough influence to secure a “seat at the table”, they will “stay at the table”. Once included, they generally stay included.

This paper reveals the dynamics of how outsider elements become insiders. It highlights a shift: from exclusion—where efforts are made to keep radical newcomers out of decision-making processes—to inclusion, to embracing these newcomers and integrating them into coalitions or decision-making bodies. In return, there's often an expectation for these groups to moderate their positions somewhat, although they will still retain some extreme elements. This dynamic mirrors current events in Europe and beyond – and helps to explain, in part, what is happening when we see political systems react to disrupting elements.

Another disruption we see increasingly more is democratic backsliding.

Indeed. In my first paper, “Persistence in Power of Long-Lived Parties” -- which of course is a bit special for me -- I examine factors that can drive a political party to try to hold onto power through all means —legal or illegal.  What I’ve learned is that a party’s beliefs and expectations about the other parties are crucial. If a party believes its rivals will use all methods to remain in power, it is more likely to employ them as well. This creates a scenario where either side, once in power, strives to stay in power by any means available, regardless of norms, standards, or the law.

This challenges the simplistic notion of good versus bad actors. And it illustrates how changes in behavior by one party can lead to a broader erosion of democratic norms as both parties seek to secure their continuity in power.

What are you going to be teaching at Harris?

I'll be teaching analytical politics. Formal theory will be a key component of the course. I’ll also be teaching dynamic game theory at our Ph.D. program, trying to make these tools accessible for future researchers in political economy. There are still so, so many intriguing questions in the field waiting to be addressed.