Chapter 7: Political Reform

What is government itself but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.

- James Madison, 1788.

James Madison. NPG, CC0, via Wikimedia Commons

One of the main themes of the book so far has been that cohesive political institutions are vital for cultivating peace as well as investments in state capacity. But our analysis has kept the details of politics in the background - the exception being strategic decisions on violence to affect political turnover.

In this chapter, we peek into this black box and more closely examine the role of political institutions and political reform in our framework. This exercise will help us understand why some countries end up with cohesive institutions while others fail to do so.

At first, we take the perspective of a constitutional convention behind the veil of ignorance, where vested interests are kept outside the picture. Here, the case for cohesive institutions becomes quite compelling and we provide a formal statement of this point.

Next, we consider real-time strategic political reform, studying the choice of political institutions made by a period-1 incumbent in our core model. This simulates the experience of older and more established polities like Sweden or the U.K., where political reform has been an evolutionary process. However, the analysis is relevant in any polity, where the incumbent can propose a change in the constitution. We explore the forces that shape the choice of in this setting and point out how incumbency bias creates forces that steer away from cohesiveness.

This chapter affords an opportunity to make contact, albeit superficially, with large literatures in the fields of political economics and comparative politics, which look at the detailed workings of political institutions, theoretically and empirically. Representing political institutions through reducedform parameters like and is crude at best, and remote from the detailed modeling of alternative rules for elections, legislative processes, and forms of government. We start out the second part of the chapter by sketching out micropolitical foundations for parameters and .

Up to this point in the chapter, we simply assume that any changes in the rules for rulemaking can indeed be enforced. In practice, constitutions are typically enforced by rules that impose costs of change, such as requiring decisions by supermajorities and/or popular referenda. We next explore how such rules create institutional inertia, which can either help or inhibit the creation of cohesive institutions.

A more ambitious step is to revisit the implications of political violence in this new setting. The threat of political violence enters the analysis in two ways. Since incumbents can use violence to reduce the chances of political turnover, they become more likely to opt for non-cohesive institutions. But the costs of realized violence under noncohesive institutions tend to pull in the opposite direction.