A spatial theory of party formation

Members of an assembly that chooses policies on a series of multidimensional ideological issues have incentives to coalesce and coordinate their votes, forming political parties. If an agent has an advantage to organize a party at a lower cost, a unique party forms and the policy outcome moves away from the Condorcet winning policy, to the benefit of party members. If all agents have the same opportunities to coalesce into parties, at least two parties form. The results are robust to the consideration of an endogenous agenda and to generalizations of the distribution of preferences.