Romer, T. and H. Rosenthal (1978), Political Resource Allocation, Controlled Agendas and the Status Quo
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| Has author | Romer, T. and H. Rosenthal |
| Has year | 1978 |
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Back to BPP Field Exam Papers 2012
Background
Committees allow for division of labor and gains from specialization. However, a committee also has gate keeping power. If gates kept closed, the status quo prevails. If gates opened, the policy outcome depends on if open or closed rule is use.
Open Rule
If committee opens gates, legislators propose policies to challenge status quo. Simply majority voting selects Condorcet winner [math]x_{m}[/math]. Committee only opens gate if he prefers [math]x_{m}[/math] to [math]x_{0}[/math] the status quo.
Suppose [math]x_{0} \lt x_{c} \lt x_{m}[/math]. We can see that the median of the committee prefers [math]x_{0}[/math] to [math]x_{m}[/math], so he will keep the gates closed and not allow a vote, as voting will result in [math]x_{m}[/math]. Thus, we get a status quo bias under open rule.
Closed Rule
The closed rule solves these types of commitment problems.
