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We develop a dynamic model of narrative-based political competition.
Voters recall the frequency of policies and outcomes, but not
their correlation. Politicians exploit such coarse memory by crafting
plausible narratives that overstate their policy’s effectiveness,
reattributing outcomes to steal credit and shift blame. Because
plausibility makes narrative optimism fall with policy implementation,
incumbency erodes narrative advantage. This force generates
endogenous policy cycles and, in the long run, makes tenure independent
of true policy effectiveness. Extensions to analogy-based
expectations, preferences for truth-telling, and heterogeneous voter
feedback show how our mechanisms operate in richer settings that
restore a role for policy effectiveness.
