The Constraining, Liberating, and Informational Effects of Non-Binding Law

55 Pages Posted: 10 Jul 2013

See all articles by Justin Fox

Justin Fox

Washington University in St. Louis - Department of Political Science

Matthew Stephenson

Harvard Law School; Institute for Corruption Studies

Date Written: June 27, 2013

Abstract

We show that non-binding law can have a constraining e ffect on political leaders, because legal compliance is a costly signal to imperfectly informed voters that the leader is unbiased. Moreover, non-binding law can also have a liberating effect, enabling some leaders to take action when they otherwise would have done nothing. In addition, we illustrate how voters may face a trade-o ff between the legal standard that induces optimal behavior of the current leader (i.e., that most effectively addresses the moral hazard problem) and the legal standard that optimizes selection of future leaders (i.e., that most e ffectively addresses the adverse selection problem). We discuss a range of positive and normative implications that follow from our analysis.

Keywords: political agency, law, politics

JEL Classification: D72

Suggested Citation

Fox, Justin and Stephenson, Matthew Caleb, The Constraining, Liberating, and Informational Effects of Non-Binding Law (June 27, 2013). Available at SSRN: https://ssrn.com/abstract=2291723 or http://dx.doi.org/10.2139/ssrn.2291723

Justin Fox (Contact Author)

Washington University in St. Louis - Department of Political Science ( email )

One Brookings Drive
Campus Box 1063
St. Louis, MO 63130
United States

HOME PAGE: http://sites.wustl.edu/justinfox/

Matthew Caleb Stephenson

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States
617-495-9863 (Phone)

Institute for Corruption Studies

Stevenson Hall 425
Normal, IL 61790-4200
United States

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