Political competition and voter mobility

The existing model of political competition is extended to allow voters to live in different regions and to migrate between regions in response to an inter-regional transfer policy. We then show that regions have a different "weight'' in the expected vote function of political parties. This gives pa rties an incentive to bias the transfer policy in favour of relatively high weight regions, with potentially adverse efficiency and equity effects. Ho wever, we then show that parties always propose efficient and equitable reg ional transfers, regardless of whether regions have different weights, if t here is some mobility of citizens across regions. Mobility constrains parti es to act efficiently and equitably even though they face an incentive to a ct otherwise. However, when voters are immobile political competition leads to inequitable though efficient outcomes.