(), Gerard Roland
and Guido Tabellini
Torsten Persson: Institute for International Economic Studies, Stockholm University, Postal: Stockholm University, S-109 61 Stockholm, Sweden
Gerard Roland: Université Libre de Bruxelles
Guido Tabellini: Bocconi University
Abstract: A political constitution is like an incomplete contract: it spells out a procedure for making decisions and for delegating power, without specifying the content of those decisions. This creates a problem: the appointed policymaker could use this power for his own benefit against the interests of the citizens. In democracies, elections are the primary mechanism for disciplining public officials. But elections are not sufficient. Separation of powers between executive and legislative bodies helps the voters, in two distinct ways. First, it can elicit information held by the appointed officials and not otherwise available to the voters. Second, by playing one body against the other and by aligning the interest of the weaker body with their own, the voters can induce the two bodies to discipline each other. Separation of power only works to the voters' advantage if it is appropriately designed, however, and it can be detrimental if it creates a 'common pool' problem.
35 pages, November 6, 1997
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