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Institutional Bias towards the Status Quo

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  • Dalibor S. Eterovic

Abstract

Our model presents an underexamined element of policy reform and institutional quality, showing how the characteristics of the political system may render citizens unable to properly reward politicians who implement new projects, thus favouring politicians who secure the status quo, albeit mediocre, of the economy. Political institutions matter because they affect the value of holding office for the politician. Societies with a low-quality political system may present institutional bias towards the status quo. This bias arises from the inability of the citizens to design an effective voting rule that induces the politician to implement new projects successfully.

Suggested Citation

  • Dalibor S. Eterovic, 2011. "Institutional Bias towards the Status Quo," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(3), pages 489-514, September.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201109)167:3_489:ibttsq_2.0.tx_2-m
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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