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Separation of Powers with Ideological Parties


  • Álvaro Forteza

    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Juan S. Pereyra

    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)


Separation of powers with checks and balances (SP) is usually regarded as a key institution complementing elections in the control of elected officials. However, some analysts and many politicians also warn that excessive checks on the executive in the presence of polarization may lead to political inaction. We present a political agency model with ideological parties where citizens and politicians care about rents (the valence issue) and policy (a positional issue). We show that SP unambiguously raises voters welfare in highly-polarized non-competitive political environments, because it strengthens both discipline and selection without causing political gridlock (voters can grant the executive the legislative majorities needed to enact reforms). SP also raises voters’ welfare if elections are very effective at disciplining first period incumbents. However, SP may reduce it if most rents go undetected and reformis not a first order issue.

Suggested Citation

  • Álvaro Forteza & Juan S. Pereyra, 2019. "Separation of Powers with Ideological Parties," Documentos de Trabajo (working papers) 0319, Department of Economics - dECON.
  • Handle: RePEc:ude:wpaper:0319

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    References listed on IDEAS

    1. Timothy Besley & Hannes Mueller, 2018. "Institutions, Volatility, and Investment," Journal of the European Economic Association, European Economic Association, vol. 16(3), pages 604-649.
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    More about this item


    Political agency; separation of powers; checks and balances;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E69 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Other
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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