Antoine Loeper
Northwestern U.



(Monday, 21st May 2012)

Title : Dynamic legislative bargaining

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Since the seminal work of Baron and Ferejohn (Bargaining in Legislatures, The American Political Science Review, Vol. 83, No. 4., Dec., 1989), political economists have analyzed legislative bargaining via game theoretic models in which legislators with conflicting interests and ideologies bargain under specific procedures over various issues such as redistribution, taxes, or public good provision. These models have explained how different voting procedures (that is, different allocation of procedural rights such as proposal power, veto power, voting weights…) can generate different policy outcome, and why inefficient policies can arise in equilibrium (most notably, pork barrel policies).
However, most of these models are static in nature in that they implicitly assume that the legislature adjourns once a policy proposal is approved by a winning coalition. In particular, legislators do take into account the effect of today’s policy on future decisions.
In this workshop, we will discuss the recent attempts that have been made to understand the dynamic aspects of legislative bargaining. The central idea is that most public policies and dynamic decision procedures generate linkages across bargaining periods. For instance, the current fiscal policy affects the future status quo, as well as the future debt level. In game theoretic terms, a dynamic linkage simply means that today’s bargaining outcome has an impact on the following bargaining subgame. These dynamic linkages generate intertemporal trade-offs, and shape the incentives of legislators in all periods.
The recent literature on legislative bargaining has shown that once taken into account, these dynamic effects can shed a new light on status quo inertia, fiscal policy dynamics, proposal power, or the size of winning coalitions in distributive politics settings.

Bibliographical references :

Marco Battaglini and Stephen Coate. 2007. “Inefficiency in Legislative Policymaking: A Dynamic Analysis.” The American Economic Review, 97(1): 118-149.
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Diermeier, Daniel and Pohan Fong. 2011. “Legislative Bargaining with Reconsideration. Quarterly Journal of Economics, 126: 947-985
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Dziuda, Wiola and Antoine Leper. 2012. “Dynamic Collective Choice with Endogenous Status Quo.” Working paper.
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