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A Master of Two Servants: The Effect of Separation of Powers on Public Accountability and Social Welfare

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  • Mordechai E. Schwarz

    (Department of Economics and Management, The Open University of Israel and Open University Institute for Policy Analysis)

Abstract

While history is abundant with authoritarian rulers who reluctantly delegated governance powers to other institutions, the intriguing question is why would democratic powerful rulers delegate powers voluntarily to (probably) contrarian institutions, and tolerate activism that impedes the implementation of their elections commitments. Based on Fiorina (1982) blame-deflection hypothesis, which postulates that politicians use the separation of powers principle as a shield against public criticism and accountability, I develop a principal-agent model that addresses Stephenson (2003) criticism and show that in subgame-perfect stationary equilibrium the principal is usually manipulated. I extend the model to embed memory, learning, and objective judiciary and show that the equilibria are preserved but social welfare is lower.

Suggested Citation

  • Mordechai E. Schwarz, 2020. "A Master of Two Servants: The Effect of Separation of Powers on Public Accountability and Social Welfare," Proceedings of International Academic Conferences 10612466, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:10612466
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    More about this item

    Keywords

    Constitution; Separation of Powers; Collusion; Asymmetric Information;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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