Information Aggregation and Optimal Structure of the Executive

Torun Dewan, Andrea Galeotti, Christian Ghiglino and Francesco Squintani

American Journal of Political Science, 2015, vol. 59, issue 2, 475-494

Abstract: We model two aspects of executives in parliamentary democracies: Decision‐making authority is assigned to individuals, and private information is aggregated through communication. When information is relevant to all policies and communication is private, all decisions should be centralized to a single politician. A government that holds cabinet meetings, where information is made available to all decision makers, outperforms one where communication is private: A multimember cabinet can be optimal; it need not be single peaked around the most moderate politician or ideologically connected. Centralization is nonmonotonic in the degree of ideological divergence. In a large cabinet, all power should be given to the most moderate politician. Even when uncertainty is policy specific and a single politician is informed on each policy, power should never be fully decentralized. Our model provides a justification for centralized authority and cabinet meetings that enhance the quality of policy.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:wly:amposc:v:59:y:2015:i:2:p:475-494

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