Working Paper: CEPR ID: DP3473
Authors: Philippe Aghion; Alberto F. Alesina; Francesco Trebbi
Abstract: A fundamental aspect of institutional design is how much society chooses to delegate unchecked power to its leaders. If, once elected, a leader cannot be restrained, society runs the risk of a tyranny of the majority, if not the tyranny of a dictator. If a leader faces too many ex post checks and balances, legislative action is too often blocked. As our critical constitutional choice we focus upon the size of the minority needed to block legislation, or conversely the size of the (super) majority needed to govern. We analyse both 'optimal' constitutional design and 'positive' aspects of this process. We derive several empirical implications, which we then discuss.
Keywords: endogenous constitutions; political systems; supermajority rule
JEL Codes: H10; O30; O50
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher insulation (G52) | greater likelihood of passing beneficial reforms (D72) |
| higher insulation (G52) | increased risk of expropriation by the leader (P26) |
| large minority needed to block legislation (D72) | higher probability of beneficial outcomes (I14) |
| risk of expropriation (H13) | optimal degree of insulation (H21) |
| degree of polarization in preferences (D79) | choice of insulation (L74) |
| more polarized societies (P19) | higher insulation levels (G52) |