Gridlock, leverage, and policy bundling

•Policy bundling is typically thought to reduce legislative gridlock.•I study a dynamic model of bargaining with policy bundling.•In this setting, policy bundling may increase gridlock via a leverage incentive.•The results have implications for politics, policy, and empirical research. I consider a dynamic model of bargaining where alternatives to the status quo arrive stochastically during the bargaining process, the proposer can bundle multiple alternatives into a single proposal, and a forward-looking voter elects the agenda-setter. I show that the prevailing wisdom that policy bundling reduces gridlock—by facilitating compromise across different policy areas—is incomplete. Policy bundling can also increase gridlock: a player may veto or delay a bipartisan alternative, which is unanimously preferred to the status quo, so that in the future they can bundle this same alternative with a divisive alternative that otherwise would not pass. Gridlock of this form is more likely to occur during periods of economic or political stability and, when it occurs, suggests that traditional measures of legislator ideology will overstate polarization. From the voter’s perspective, gridlock occurs at an inefficiently high frequency. This state of “excess gridlock” is driven by the voter being forward-looking and lacking commitment power.