Dynamics and stability of constitutions, coalitions, and clubs
By: [by] Daron Acemoglu, Georgy Egorov [and] Konstantin Sonin
Contributors: Egorov, Georgy, 1979-; Sonin, Konstantin; Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 08-15; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 08-15.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2008
Place of publication: Cambridge, MA
Language: eng
Number of pages: 62
Description: A central feature of dynamic collective decision-making is that the rules that govern the procedures for future decision-making and the distribution of political power across players are determined by current decisions. For example, current constitutional change must take into account how the new constitution may pave the way for further changes in laws and regulations. We develop a general framework for the analysis of this class of dynamic problems. Under relatively natural acyclicity assumptions, we provide a complete characterization of dynamically stable states as functions of the initial state and determine conditions for their uniqueness. We show how this framework can be applied in political economy, coalition formation, and the analysis of the dynamics of clubs. The explicit characterization we provide highlights two intuitive features of dynamic collective decision-making: (1) a social arrangement is made stable by the instability of alternative arrangements that are preferred by sufficiently many members of the society; (2) efficiency-enhancing changes are often resisted because of further social changes that they will engender. Keywords: commitment, constitutions, dynamic coalition formation, political economy, stability, voting. JEL Classifications: D71, D74, C71.
Notes: "August 4, 2008."

Includes bibliographical references (p. 44-46).

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