Veto players, policy change, and institutional design

Tiberiu Dragu, Hannah K. Simpson

    Research output: Contribution to journalArticle

    Abstract

    What institutional arrangements allow veto players to secure maximal welfare when all agree on both the need for and the direction of policy change? To answer this question, we conduct a mechanism design analysis. We focus on a system with two veto players, each with incomplete information about the other’s policy preferences. We show that the unique welfare-maximizing mechanism is the mechanism that implements the preferred policy of the player whose ideal policy is closer to the status quo. We provide examples of institutional structures under which the unique equilibrium outcome of this two-player incomplete information game is the policy outcome implemented by this mechanism, and argue that our result can be used as a normative benchmark to assess the optimality of veto player institutions.

    Original languageEnglish (US)
    JournalResearch and Politics
    Volume4
    Issue number3
    DOIs
    StatePublished - Jul 1 2017

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    Keywords

    • Institutional design
    • Mechanism design
    • Veto bargaining
    • Veto players

    ASJC Scopus subject areas

    • Sociology and Political Science
    • Political Science and International Relations
    • Public Administration

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