Capture by Threat
View/ Open
Author
Dal Bó, Ernesto
Di Tella, Rafael
Published Version
https://doi.org/10.1086/376951Metadata
Show full item recordCitation
Dal Bó, Ernesto, and Rafael Di Tella. 2003. “Capture by Threat.” Journal of Political Economy 111 (5): 1123–54. https://doi.org/10.1086/376951.Abstract
We analyze a simple stochastic environment in which policy makers can be threatened by "nasty" interest groups. In the absence of these groups, the policy maker's desire for reelection guarantees that good policies are implemented for every realization of the shock. When pressure groups can harass the policy maker, good policies will be chosen for only a subset of states of nature. Hence, honest and able leaders might implement bad policies, and needed reforms could be delayed. In order to make good policies more likely, the public will want to increase the cost of exerting pressure for "nasty groups" and provide rents to those in power. This last result can be used to explain the existence of political parties. They play a role resembling that of the supervisor in the literature on collusion in hierarchical agency. A rational public may also choose to ignore negative media reports on a politician's personal life and, in general, elect "strong" political leaders. The prevalence of coercive methods of influence helps explain why countries may get to be governed by "inept politicians."Terms of Use
This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAACitable link to this page
http://nrs.harvard.edu/urn-3:HUL.InstRepos:41426663
Collections
- HBS Scholarly Articles [854]
Contact administrator regarding this item (to report mistakes or request changes)