Power

Power-sharing arrangements between a leader and a popular outsider can be mutually beneficial and threatening. The literature has focused primarily on the former’s trade-off where a leader gains legitimacy when sharing power with a respected outsider but also subsequently creates a rival who could challenge their rule. Yet this outsider also faces a simultaneous trade-off between power and credibility in acquiescing to the leadership. I incorporate both coinciding trade-offs in developing a formal model to examine such power-sharing arrangements which have been prevalent historically and currently. I illustrate a ‘discontinuity’ in optimal power sharing where a leader either shares nothing or shares a specific amount to compensate the rival for the rival’s lost credibility. Counterintuitively, I further show that the leader should share more power with less trustworthy rivals to reduce their strong incentives to challenge. I then revisit the Investiture Controversy in medieval Europe using these insights from the model