American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Policy Experimentation in Committees: A Case against Veto Rights under Redistributive Constraints
American Economic Journal: Microeconomics
(pp. 124–62)
Abstract
We study optimal policy experimentation by a committee. We consider a dynamic bargaining game in which committee members choose either a risky reform or a safe alternative each period. When no redistribution is allowed, the unique equilibrium outcome is generically inefficient. When redistribution is allowed (even small amounts), there always exists an equilibrium that supports optimal experimentation for any voting rule without veto players. With veto players, however, optimal policy experimentation is possible only with a sufficient amount of redistribution. We conclude that veto rights are more of an obstacle to optimal policy experimentation than are the constraints on redistribution themselves.Citation
Anesi, Vincent, and T. Renee Bowen. 2021. "Policy Experimentation in Committees: A Case against Veto Rights under Redistributive Constraints." American Economic Journal: Microeconomics 13 (3): 124–62. DOI: 10.1257/mic.20190023Additional Materials
JEL Classification
- C78 Bargaining Theory; Matching Theory
- D71 Social Choice; Clubs; Committees; Associations
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D78 Positive Analysis of Policy Formulation and Implementation
- H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies