Working Paper: CEPR ID: DP9446
Authors: Francesco Passarelli; Guido Tabellini
Abstract: This paper formulates a theory of how political unrest influences public policy.Political unrest is motivated by emotions. Individuals engage in protests if they are aggrieved and feel that they have been treated unfairly. This reaction is predictable because individuals have a consistent view of what is fair. This framework yields novel insights about the sources of political influence of different groups in society. Even if the government is benevolent and all groups have access to the same technology for political participation, equilibrium policy can be distorted. Individuals form their view of what is fair taking into account the current state of the world. If fewer aggregate resources are available, individuals accept a lower level of welfare. This resignation effect in turn induces a benevolent government to procrastinate unpleasant policy choices.
Keywords: emotions; fairness; political economics; procrastination; public debt; riots; unrest
JEL Codes: H0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| political unrest (P26) | political protests (D72) |
| feelings of aggrievement (D63) | political unrest (P26) |
| political protests (D72) | public policy decisions (D78) |
| perceived policy fairness (D63) | likelihood of protests (D72) |
| aggrievement in society (D63) | government's policy-making behavior (H11) |
| perceived policy constraints (D78) | resignation effect (J26) |
| fiscal retrenchments (E62) | political unrest (P26) |
| economic policy decisions (E60) | social stability (I31) |