Dynamics and Stability of Constitutions, Coalitions, and Clubs

64 Pages Posted: 7 Aug 2008  

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Georgy Egorov

Northwestern University - Kellogg School of Management; NBER

Konstantin Sonin

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies; Higher School of Economics; Centre for Economic Policy Research (CEPR)

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Date Written: August 4, 2008

Abstract

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 Classification: D71, D74, C71

Suggested Citation

Acemoglu, Daron and Egorov, Georgy and Sonin, Konstantin, Dynamics and Stability of Constitutions, Coalitions, and Clubs (August 4, 2008). MIT Department of Economics Working Paper No. 08-15. Available at SSRN: https://ssrn.com/abstract=1201982 or http://dx.doi.org/10.2139/ssrn.1201982

Daron Acemoglu (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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National Bureau of Economic Research (NBER)

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Georgy Egorov

Northwestern University - Kellogg School of Management ( email )

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NBER ( email )

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Konstantin Sonin

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies ( email )

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Higher School of Economics ( email )

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Russia

Centre for Economic Policy Research (CEPR)

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London, EC1V 3PZ
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