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Critical Decisions and Constitutional Rules

Listed author(s):
  • Aidt, T.S.
  • Giovannoni,F.

Many constitutions specify procedures that allow critical decisions to be made with a different rule from day-to-day decisions. We propose a theory of constitutional rules that explains why. The theory is based on the assumption that the type of decision can be observed, but not verified. We characterise two classes of second-best constitution, both with clear analogues in real world constitutions: i) incentive scheme (IS) constitutions that elicit information about the type of decision through costly decision rule switching procedures, and ii) linking scheme (LS) constitutions that grant limited veto powers to interested parties. We explore how the relative performance of the IS and LS constitution depends on the economic environment.

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File URL: http://www.econ.cam.ac.uk/research/repec/cam/pdf/cwpe0523.pdf
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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0523.

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Length: 44
Date of creation: May 2005
Handle: RePEc:cam:camdae:0523
Note: PE
Contact details of provider: Web page: http://www.econ.cam.ac.uk/index.htm

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  1. Matthew O Jackson & Hugo F Sonnenschein, 2007. "Overcoming Incentive Constraints by Linking Decisions -super-1," Econometrica, Econometric Society, vol. 75(1), pages 241-257, 01.
  2. Matthias Messner & Mattias K. Polborn, 2004. "Voting on Majority Rules," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 115-132.
  3. Oliver Hart & John Moore, 1998. "Foundations of Incomplete Contracts," NBER Working Papers 6726, National Bureau of Economic Research, Inc.
  4. Torsten Persson & Gerard Roland & Guido Tabellini, "undated". "Separation of Powers and Political Accountability," Working Papers 100, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  5. Giovanni Maggi & Massimo Morelli, 2006. "Self-Enforcing Voting in International Organizations," American Economic Review, American Economic Association, vol. 96(4), pages 1137-1158, September.
  6. Salvador Barberà & Matthew O. Jackson, 2000. "Choosing How to Choose: Self-Stable Majority Rules and Constitutions," Working Papers 57, Barcelona Graduate School of Economics.
  7. Toke S Aidt & Francesco Giovannoni, 2004. "Constitutional Rules," The Centre for Market and Public Organisation 04/109, Department of Economics, University of Bristol, UK.
  8. Edward J. Green, 1994. "Individual Level Randomness in a Nonatomic Population," GE, Growth, Math methods 9402001, EconWPA.
  9. Aghion, Philippe & Bolton, Patrick, 2003. "Incomplete Social Contracts," Scholarly Articles 4554123, Harvard University Department of Economics.
  10. Davide Ticchi & Andrea Vindigni, 2010. "Endogenous Constitutions," Economic Journal, Royal Economic Society, vol. 120(543), pages 1-39, 03.
  11. Aghion, Philippe & Alesina, Alberto & Trebbi, Francesco, 2004. "Endogenous Political Institutions," Scholarly Articles 4481498, Harvard University Department of Economics.
  12. Voigt, Stefan, 1997. "Positive Constitutional Economics: A Survey," Public Choice, Springer, vol. 90(1-4), pages 11-53, March.
  13. Gersbach, Hans, 2005. "Democratic Mechanisms: Double Majority Rules and Flexible Agenda Costs," CEPR Discussion Papers 5013, C.E.P.R. Discussion Papers.
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