This paper argues that there is an efficiency gain underlying the recent adoption of legislation calling for a fixed four-year governing term by the federal and most provincial governments in Canada. The efficiency gain arises from foreclosing an externality produced by the constitutional provision that sets a maximum length for a legislative term (five years) while allowing the governing party (through the Governor General) to dissolve the House early. Because the opportunistic use of surprise can improve the governing party’s probability of winning, strategic choice can lead to elections being held at times that most disadvantage the incumbent’s rivals. Evidence from Canada is introduced suggesting that federal elections became less predictable through successive reductions in the campaign time given to competitors, thus raising the cost of this externality. The same reasoning suggests that the party most likely to propose this legislative innovation will be the party in opposition rather than in power and/or the new leader of an established party facing loss in the upcoming election. By fulfilling the fixed term even when it could benefit by calling the election early, the party establishes a precedent that raises the political cost to others of cancelling the fixed term legislation.

Additional Metadata
Keywords Fixed election dates, discretionary election times, time inconsistency, institutional externalities
JEL Structure and Scope of Government (jel H1), Analysis of Collective Decision-Making (jel D7), Information, Knowledge, and Uncertainty (jel D8)
Publisher Department of Economics
Series Carleton Economic Papers (CEP)
Note Revised 1 December 2016
Ferris, J.S, & Olmstead, D.E.H. (2013). Fixed versus Flexible Election Cycles: Explaining innovation in the timing of Canada’s Election Cycle (No. CEP 12-04). Carleton Economic Papers (CEP). Department of Economics.