Endogenous Limits on Proposal Power

Daniel Diermeier and Pohan Fong

No 1464, Discussion Papers from Northwestern University, Center for Mathematical Studies in Economics and Management Science

Abstract: We present a dynamic model of legislative bargaining in which policy making proceeds until the proposer has no more incentive to make a new proposal to replace the previously approved policy. We characterize stationary Markov perfect equilibria for the game and show that in all pure-strategy equilibria, a majority of voters without proposal power have an incentive to protect each others' benefits to secure their own long-term bargaining positions in the legislature. As a consequence, the value of proposal power is constrained.

Keywords: Parliamentary democracy; proportional representation; government formation; policy dynamics; lack of commitment; inefficiency. (search for similar items in EconPapers)
JEL-codes: C7 D7 H1 (search for similar items in EconPapers)
Date: 2009-07-01
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Citations: View citations in EconPapers (5)

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Working Paper: Endogenous Limits on Proposal Power (2008)
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