Optimal Checks and Balances Under Policy Uncertainty

Working Paper: CEPR ID: DP14745

Authors: Gabriele Gratton; Massimo Morelli

Abstract: Political checks and balances are certainly among the most debated desiderata in the construction of democratic systems and their evaluation. This paper suggests a conceptual framework that could be useful to inform this debate. We propose a model where the pros and cons of a strengthening of checks and balances are respectively the reduction of type-I errors and the increase of potential type-II errors in policy decision-making. Checks and balances are less desirable for intermediate levels of competence of the political class and more desirable when the bureaucracy is slower or when the political system involves frequent turnover, and in policy areas where the welfare effects of a reform are harder to evaluate and effective accountability is low.

Keywords: checks and balances; information; uncertain policy; quality; effective accountability

JEL Codes: No JEL codes provided


Causal Claims Network Graph

Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.


Causal Claims

CauseEffect
checks and balances (D72)type I errors (C20)
checks and balances (D72)type II errors (C52)
checks and balances (D72)voter welfare (K16)
competence among politicians (D72)checks and balances (D72)
bureaucracy speed (D73)checks and balances (D72)
political system turnover (P39)checks and balances (D72)

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