Elements of an economic theory of political institutions are introduced. A variety of electoral systems are reviewed. Cox's threshold is shown to measure incentives for diversity and specialization of candidates' positions, when the number of serious candidates is given. Duverger's law and its generalizations are discussed, to predict the number of serious candidates. Duberger's law is interpreted as a statement about electoral barriers to entry, and this idea is linked to the question of the effectiveness of democratic competition as a deterrent to political corruption. The impact ofpost-electoral bargaining on the party structure in presidential and parliamentary systems is discussed.