Political Design Meets Policy Complexity

42 Pages Posted: 29 Nov 2018 Last revised: 17 Mar 2020

See all articles by Roland Pongou

Roland Pongou

University of Ottawa - Department of Economics

Jean-Baptiste Tondji

University of Texas Rio Grande Valley (UTRGV) (Formerly University of Texas-Pan American) - Economics and Finance; Department of Economics and Finance, University of Texas Rio Grande Valley

Date Written: March 10, 2020

Abstract

The rules that are employed to pass policies in legislative bodies vary widely. It is generally argued that policies that differ in complexity or importance level should be decided under different kinds of voting rules. While this question has been examined for static legislative mechanisms, an analysis of the precise relationship between the level of policy complexity and the type of voting rule is still missing for dynamic mechanisms. We address this problem from the perspective of a preference-blind political designer. Given the level of complexity of the decision that is to be made, the political designer's goal is to select the supermajority rule that avoids (1) policy instability; (2) guarantees efficiency; and (3) minimizes institutional status quo bias. We provide an answer to this objective problem, deriving a closed-form relationship between voting rule and policy complexity. Our analysis rationalizes the use of different rules to adopt different types of policy only when preferences are weak. When preferences are strong, the optimal rule is unique, and it does not vary by level of policy complexity. These findings significantly differ from those obtained for static mechanisms. Our study also implies that more complex policies are more likely to be persistent, even after a change in political preferences.

Keywords: Legislative Institutions; Dynamic Decision Making; Political Design; Voting Rules; Policy Complexity; Policy Importance

JEL Classification: P16, D72, C7, H41

Suggested Citation

Pongou, Roland and Tondji, Jean-Baptiste, Political Design Meets Policy Complexity (March 10, 2020). Available at SSRN: https://ssrn.com/abstract=3287477 or http://dx.doi.org/10.2139/ssrn.3287477

Roland Pongou

University of Ottawa - Department of Economics ( email )

200 Wilbrod Street
Ottawa, Ontario K1N 6N5
Canada

Jean-Baptiste Tondji (Contact Author)

University of Texas Rio Grande Valley (UTRGV) (Formerly University of Texas-Pan American) - Economics and Finance ( email )

1201 W. University Dr.
Edinburg, TX
United States

Department of Economics and Finance, University of Texas Rio Grande Valley ( email )

1201 W. University Drive
Edinburg, TX 78541
United States
956-665-2825 (Phone)

HOME PAGE: http://https://sites.google.com/site/jbtondjicom

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