| This dissertation examines, using game-theoretical tools, various aspects of the interaction between policy outcomes and political institutions in dynamic environments. The first chapter studies political failures arising from dynamic political linkage, i.e., situations in which current policies systematically influence the electorate's future political preferences. Using a dynamic model of electoral competition in a public finance environment, we analyze how these political failures are influenced by institutional (most notably, majoritarian or consensual constitution) and non institutional factors (most notably, how far-sighted voters and politicians are). The key contribution is to show how, when the source of political distortions are policies' long term political consequences, majoritarian constitutions, farsightedness, and political persistence tend to worsen - rather than improve, as argued in most of the previous literature - the performance of the political process. The second chapter studies how direct democracy institutions (e.g., initiatives, referenda) influence the relationship between voters and elected representatives. To achieve this goal, we analyze a model of political agency with moral hazard and adverse selection, where initiatives are captured by the presence of ex post costly policy amendments. The main result is that initiatives, even when ex post welfare improving, can be ex post welfare reducing because they hamper's voters ability to use elections to reward policy effort and screen competent politicians. The third chapter studies restrictive procedure in majoritarian collective decision making bodies. Using a model of multi-stage legislative bargaining, we propose a novel theory for asymmetric (that is, generating policies systematically biased away from the group median) and restrictive (that is, concentrating proposal power in the hands of a few members) procedures, such as the committee system in the US Congress. This theory, unlike most of the previous literature, does not assume any form of procedural commitment, and shows how the latter can be a self-enforcing, equilibrium phenomenon for which we provide an explicit microfoundation. |
