Learning from corporate governance: First conceptualization of a liability for political decision‐making

Florian Follert

Kyklos, 2023, vol. 76, issue 4, 809-826

Abstract: The institution of liability serves to mitigate the lack of care in almost all areas, whether private or business. However, we have not yet found such an institution in political decision‐making. Surprisingly, the literature has not discussed a specific institution that subjects political actors who fail to exercise due diligence in their decision‐making regarding personal liability. Hence, this paper aims to fill this gap and derive the necessity of internalizing the negative effects resulting from the imperfections of the market for political services in general and the democratic process, particularly by a liability rule. To design the new institution, we draw on the findings of corporate governance, combining economic thinking in incentives and legal knowledge expressed in the law of the corporation. In this respect, this paper is the first to make a concrete proposal for political liability accompanied by a political judgment rule. However, it is important to emphasize that the aim is not to punish a wrong decision but to provide strong incentives to prevent it ex ante. Political liability must be understood as a process‐oriented institution that considers uncertainty and decision‐making complexities. By proposing and analyzing this new institution, this work contributes to a broader discussion of incentive structures in the political process of modern democracies and shows how the political sphere can learn from the corporate world.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/kykl.12351

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:kyklos:v:76:y:2023:i:4:p:809-826

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0023-5962

Access Statistics for this article

Kyklos is currently edited by Rene L. Frey

More articles in Kyklos from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().