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Policy Reforms and the Amount of Checks & Balances

Author

Listed:
  • Hans Gersbach

    (CER-ETH – Center of Economic Research at ETH Zurich and CEPR Zuerichbergstrasse 18 8092 Zurich, Switzerland)

  • Oriol Tejada

    (Faculty of Economics and Business Universitat de Barcelona Diagonal 690-696 08034 Barcelona, Spain)

  • Julia Wagner

    (CER-ETH – Center of Economic Research at ETH Zurich and CEPR Zuerichbergstrasse 18 8092 Zurich, Switzerland)

Abstract
We examine how democracies choose their amount of checks and balances (C&B). For this purpose, we consider a simple model of political competition with costly policy reforms. The cost of a marginal reform is determined endogenously at the constitutional phase—i.e. before policies are chosen—through the choice of (the amount of) C&B. We characterize the set of stable C&B for different constitutional rules which vary depending on (i) who has the power to propose changes to C&B and (ii) on the qualified majority used for approving such changes. Our main results show that stable C&B always exist, are never zero, lead to gridlock, and are higher if the proposal-maker is the party in government. We also find that higher majority requirements for constitutional changes and more polarized societies are conducive to larger sets of stable C&B.

Suggested Citation

  • Hans Gersbach & Oriol Tejada & Julia Wagner, 2022. "Policy Reforms and the Amount of Checks & Balances," CER-ETH Economics working paper series 22/373, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    • Handle: RePEc:eth:wpswif:22-373
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    File URL: https://www.ethz.ch/content/dam/ethz/special-interest/mtec/cer-eth/cer-eth-dam/documents/working-papers/WP-22-373.pdf
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    References listed on IDEAS

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    Cited by:

    1. Gersbach, Hans & Jackson, Matthew O. & Muller, Philippe & Tejada, Oriol, 2023. "Electoral competition with costly policy changes: A dynamic perspective," Journal of Economic Theory, Elsevier, vol. 214(C).
    2. Loeper, Antoine & Dziuda, Wioletta, 2024. "Voters and the trade-off between policy stability and responsiveness," Journal of Public Economics, Elsevier, vol. 232(C).

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    More about this item

    Keywords

    elections; democracy; political polarization; reform costs; constitutions; checks and balances;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H4 - Public Economics - - Publicly Provided Goods

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