Most academic departments are democracies, at least on paper. Do they work the same way as other democracies, where the median voter basically gets his way? (Well, at least that's my take on democracy).
From my experience, the answer is a strong yes. Hiring decisions are usually the main subject of controversy. The people who get hired generally match the preferences of the moderate members of the department in all major respects. If the moderate members want to hire theorists (often, though not always, because they are theorists), the department hires theorists. In departments where members care about politics (social sciences and humanities, for the most part), the winning candidates generally share the politics of the moderate members of the department. In fields like math, physics, and economics, where profs care more about merit than "diversity," (and strongly believe that a trade-off exists) you see far fewer "diversity hires" than you do in fields like English or sociology.
Another contentious issue, of course, is compensation. How unequal should salaries be - and should the main correlate of pay be merit or seniority? On this issue, I can't honestly say that I've actually looked at pay structures for various departments. But my impression is that fields where egalitarian values are weaker - like hard sciences and economics - have more inequality and less emphasis on seniority than other fields. (Anyone else care to chime in here?)
On the surface, there are two reasons to doubt that the median voter model would work at the level of academic departments. The first is the standard objection that the model requires unidimensional preferences. But there's lots of evidence from the real world of politics that multidimensionality is an illusion; while there are many issues, political struggle generally boils down to One Big Issue (like liberalism versus conservatism in the U.S.). It's far from clear that academic politics is any different, though the One Big Issue probably varies from field to field, and even department to department. (Is there One Big Issue in your department? If so, what?)
The more serious objection to applying the median voter model to academic politics is that the model assumes that two people actually want to be chairman! According to the model, the winning politician has to give the median voter what he wants. If he doesn't, a competing politician will. In academia, however, the job of chairman is often so unrewarding that it's hard enough to get one person to run for office, much less two. In principle, that should give the chairman some compensatory slack to do as he likes.
Perhaps the median voter model seems to work simply because the guy who gets stuck with the job is usually a moderate? As long as moderates predominate, this would happen with no selection mechanism at all. (Hmm, this reminds me of a paper I wrote on why dictatorship has less effect on policy than you'd think).
Are there any other big academic issues that I'm missing? How well does the median voter model work there?