Presidential Term Limits and Policy Choice

We analyzed a model showing that voters are not fully informed of the best utility points of the politicians. We checked the equilibrium under the complete and incomplete information cases. In the one-term limit game, the winner follows his best utility policy, so there is no policy convergence in equilibrium. But the winner may moderate his policy choice when there is enough compensation from the ruling party or the next presidential candidate. In the two term limit presidency, we came to know that the incumbent is moderating his policy choice in the first term, but its degree of pursuing policy depends on the discount factor, the first derivative of the probability of getting elected, and effects of period 1 policy on the expectations of period 2 policy. We compared the Korean single-term limited presidency with the American two-term limited presidency for empirical evidence. Under a one-term limited presidency, it becomes a difficult job for incumbent to pursue his agenda as his time in office draws near to end. The single term presidency repeatedly revealed weaknesses in managing crises as well as inability of maintaining consistency of policies. It also failed to give motivation to the president to be accountable and responsive to the voters and exacerbates early lame duck phenomenon. In the first term, American presidents may become moderate in his first term, its degree may depend on the likelihood of being reelected, and the responses of voters to the policies taken in the first period. (JEL: C72, D72, D73)