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Constitutional Rules and Efficient Policies

Author

Listed:
  • Michela Cella
  • Giovanna Iannantuoni
  • Elena Manzoni

Abstract

This paper compares the ability to select the efficient policy of a parliamentary and a presidential constitutional setup. In order to do it we build a dynamic theoretical model with asymmetric information that succeeds in addressing both the politicians accountability and the competence dimensions. The main difference between the two institutional frameworks is the presence of the confidence vote in the parliamentary system that may cause elections before the natural end of the legislature. The equilibrium predictions suggest that, exactly because of the different incentives created by the confidence vote, the parliamentary system has a higher probability of selecting the efficient policy the higher is the quality of politicians that are member of the legislative body.

Suggested Citation

  • Michela Cella & Giovanna Iannantuoni & Elena Manzoni, 2014. "Constitutional Rules and Efficient Policies," Working Papers 270, University of Milano-Bicocca, Department of Economics, revised Mar 2014.
    • Handle: RePEc:mib:wpaper:270
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    File URL: http://dems.unimib.it/repec/pdf/mibwpaper270.pdf
    File Function: First version, 2014
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    References listed on IDEAS

    as
    1. Daniel Diermeier & Razvan Vlaicu, 2011. "Executive Control and Legislative Success," Review of Economic Studies, Oxford University Press, vol. 78(3), pages 846-871.
    2. Torsten Persson & Guido Tabellini, 2002. "Political Economics: Explaining Economic Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661314.
    3. Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," American Economic Review, American Economic Association, vol. 94(4), pages 1034-1054, September.
    4. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-156, March.
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    Cited by:

    1. Luca Bettarelli & Michela Cella & Giovanna Iannantuoni & Elena Manzoni, 2015. "It's a matter of confidence: Institutions, government stability and economic outcomes," Working Papers 309, University of Milano-Bicocca, Department of Economics, revised Sep 2015.

    More about this item

    Keywords

    presidential system; parliamentary system; comparison con dence vote; hierarchical accountability;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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