The Making of Policy: Institutionalized or Not?

Authors


  • Carlos Scartascini is Leading Economist at the Research Department, Inter-American Development Bank, 1300 New York Ave. NW, Washington, DC 20577 (carlossc@iadb.org). Mariano Tommasi is Professor of Economics, Universidad de San Andrés, Vito Dumas 284, Victoria, Buenos Aires, Argentina, B1644BID (tommasi@udesa.edu.ar).

  • We received valuable comments from Facundo Albornoz, Mariana Chudnovsky, Thad Dunning, Jon Eguia, David Epstein, Alberto Fohrig, Macartan Humphreys, Marcelo Leiras, Johannes Lindvall, Cesar Martinelli, Sebastián Miller, Massimo Morelli, Vicky Murillo, Leonardo Park, Pablo Pinto, Susan Rose-Ackerman, Frances Rosenbluth, Martín Rossi, Alejandro Saporiti, Ken Scheve, Ernesto Stein, David Stasavage, Susan Stokes, Kaj Thommson, Razvan Vlaicu, Federico Weinschelbaum, and seminar participants at Columbia University, George Mason University, George Washington University, the Hertie School of Governance, the Inter-American Development Bank, Maastricht University, New York University, Universidad de Salamanca, Universidad de San Andrés, Universidad Di Tella, University of Maryland, Yale University, the LACEA Meeting in Rio de Janeiro, the LACEA Political Economy Group Meeting in Cartagena, the Yale Conference on Fighting and Voting, the DC Comparative Politics and Political Economy Seminar, and the International Economic Association Meeting in Beijing. We thank the Editor, an Associate Editor, and three reviewers for an extremely thorough and constructive revision process which has led to a much tighter and clearer article than the one we originally submitted. We are particularly indebted to Adam Przeworski for generously sharing his ideas on these issues; to Fabiana Machado for allowing us to draw from our joint ongoing empirical work on protests in Latin America, as well as for valuable suggestions; and to Laura Trucco for extraordinary research assistance, useful comments, and for allowing us to draw freely from joint ongoing work. Mariano Tommasi thanks the hospitality of the Research Department of the Inter-American Development Bank. The data used in this article are publicly available from the sources listed in the document.

Abstract

This article attempts to build bridges in the formal study of policymaking across polities of different degrees of institutional development. It explores the reasons why policymaking is fairly institutionalized in some polities but not in others. It suggests extending standard models of institutionalized policymaking to allow for a wider set of actions, including the threat of violence or of damage to the economy. It engages the discussion of institutions as rules and institutions as equilibria, delivering multiple equilibria with different degrees of institutionalization. The likelihood of institutionalized policymaking increases as the cost of alternative political actions increases, as the damage these alternatives cause decreases, and as the economy becomes wealthier. In cases in which the distribution of de jure political power is more asymmetric, it is more likely to observe use of alternative political technologies as well as low degrees of institutionalization.

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