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Tying the Politicians' Hands: The Optimal Limits to Representative Democracy

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  • Didier Laussel

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université)

Abstract

We study the optimal delegation problem which arises between the median voter (writer of the constitution) and the (future) incumbent politician when not only the state of the world and but also the politician's type (preferred policy) are the policy-maker's private information. We show that it is optimal to tie the hands of the politician by imposing him/her both a policy floor and a policy cap and delegating him/her the policy choice only in between. The delegation interval is shown to be the smaller the greater is the uncertainty about the politician's type. These results apply outside the specific problem to which our model is applied here.

Suggested Citation

  • Didier Laussel, 2018. "Tying the Politicians' Hands: The Optimal Limits to Representative Democracy," Working Papers halshs-01690177, HAL.
  • Handle: RePEc:hal:wpaper:halshs-01690177
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01690177
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    More about this item

    Keywords

    representative democracy; political uncertainty; optimal delegation;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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