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Capture by Threat

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Author Info

  • Ernesto Dal Bo
  • Rafael Di Tella

Abstract

We analyze a simple stochastic environment in which policy makers can be threatened by "nasty" interest groups. In the absence of these groups, the policy maker's desire for reelection guarantees that good policies are implemented for every realization of the shock. When pressure groups can harass the policy maker, good policies will be chosen for only a subset of states of nature. Hence, honest and able leaders might implement bad policies, and needed reforms could be delayed. In order to make good policies more likely, the public will want to increase the cost of exerting pressure for "nasty groups" and provide rents to those in power. This last result can be used to explain the existence of political parties. They play a role resembling that of the supervisor in the literature on collusion in hierarchical agency. A rational public may also choose to ignore negative media reports on a politician's personal life and, in general, elect "strong" political leaders. The prevalence of coercive methods of influence helps explain why countries may get to be governed by "inept politicians."

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 111 (2003)
Issue (Month): 5 (October)
Pages: 1123-1152

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Handle: RePEc:ucp:jpolec:v:111:y:2003:i:5:p:1123-1152

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Web page: http://www.journals.uchicago.edu/JPE/

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Cited by:
  1. Pablo T. Spiller, 2011. "Transaction Cost Regulation," NBER Working Papers 16735, National Bureau of Economic Research, Inc.
  2. Petrova, Maria, 2008. "Inequality and media capture," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 183-212, February.
  3. Fabio Padovano, 2013. "Are we witnessing a paradigm shift in the analysis of political competition?," Public Choice, Springer, vol. 156(3), pages 631-651, September.
  4. Gradstein, M., 2007. "Institutional Traps and Economic Growth," Cambridge Working Papers in Economics 0769, Faculty of Economics, University of Cambridge.
  5. Galasso, Vincenzo & Nannicini, Tommaso, 2009. "Competing on Good Politicians," IZA Discussion Papers 4282, Institute for the Study of Labor (IZA).
  6. Monica Martinez-Bravo, 2013. "The Role Of Local Officials In New Democracies: Evidence From Indonesia," Working Papers wp2013_1302, CEMFI.
  7. Antonio Estache & Liam Wren-Lewis, 2010. "What Anti-Corruption Policy Can Learn from Theories of Sector Regulation," Working Papers ECARES ECARES 2010-033, ULB -- Universite Libre de Bruxelles.
  8. Klaas Beniers & Robert Dur, 2007. "Politicians’ motivation, political culture, and electoral competition," International Tax and Public Finance, Springer, vol. 14(1), pages 29-54, February.
  9. Ernesto Dal B� & Pedro Dal B� & Jason Snyder, 2009. "Political Dynasties," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 115-142.
  10. Ernesto Dal Bó & Pedro Dal Bó & Rafael Di Tella, 2002. "'Plata o Plomo': Bribe and Punishment in a Theory of Political Influence," Working Papers 2002-28, Brown University, Department of Economics.
  11. repec:dgr:uvatin:2004065 is not listed on IDEAS
  12. Pierre Yared & Gerard Padro i Miquel, 2010. "The Political Economy of Indirect Control," 2010 Meeting Papers 306, Society for Economic Dynamics.
  13. Boeri, Tito & Severgnini, Battista, 2011. "Match rigging and the career concerns of referees," Labour Economics, Elsevier, vol. 18(3), pages 349-359, June.
  14. Clare Leaver, 2007. "Bureaucratic Minimal Squawk Behavior: Theory and Evidence from Regulatory Agencies," Economics Series Working Papers 344, University of Oxford, Department of Economics.
  15. David P. Myatt & Torun Dewan, 2005. "Scandal, Protection, and Recovery in Political Cabinets," Economics Series Working Papers 237, University of Oxford, Department of Economics.
  16. Albrecht Morgenstern, 2004. "Curbing Power or Progress? Governing with an Opposition Veto," Bonn Econ Discussion Papers bgse10_2004, University of Bonn, Germany.

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