Political selection and persistence of bad governments

Daron Acemoglu*, Georgy Egorov, Konstantin Sonin

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

39 Scopus citations

Abstract

We study dynamic selection of governments under different political institutions, with a special focus on institutional "flexibility." A government consists of a subset of the individuals in the society. The competence level of the government in office determines collective utilities (e.g., by determining the amount and quality of public goods), and each individual derives additional utility from being part of the government (e.g., rents from holding office). We characterize the dynamic evolution of governments and determine the structure of stable governments, which arise and persist in equilibrium. In our model, perfect democracy, where current members of the government do not have veto power over changes in governments, always leads to the emergence of the most competent government. However, any deviation from perfect democracy, to any regime with incumbency veto power, destroys this result. There is always at least one other, less competent government that is also stable and can persist forever, and even the least competent government can persist forever in office. We also show that there is a nonmonotonic relationship between the degree of incumbency veto power and the quality of government. In contrast, in the presence of stochastic shocks or changes in the environment, a regime with less incumbency veto power has greater flexibility and greater probability that high-competence governments will come to power. This result suggests that a particular advantage of "democratic regimes" (with a limited number of veto players) may be their greater adaptability to changes rather than their performance under given conditions. Finally, we show that "royalty-like" dictatorships may be more successful than "junta-like" dictatorships because in these regimes veto players are less afraid of change.

Original languageEnglish (US)
Pages (from-to)1511-1575
Number of pages65
JournalQuarterly Journal of Economics
Volume125
Issue number4
DOIs
StatePublished - Nov 2010

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Political selection and persistence of bad governments'. Together they form a unique fingerprint.

Cite this