Demand and Supply Curves in Political Markets : Understanding the Problem of Public Goods and Why Governments Fail Them
This paper brings the economic tools of demand and supply curves to better understand how political markets shape the selection of government policies. It does so to tackle a problem at the intersection of political science and economics: governmen...
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World Bank, Washington, DC
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| Online Access: | http://documents.worldbank.org/curated/en/688181507656703024/Demand-and-supply-curves-in-political-markets-understanding-the-problem-of-public-goods-and-why-governments-fail-them http://hdl.handle.net/10986/28548 |
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okr-10986-285482021-06-08T14:42:45Z Demand and Supply Curves in Political Markets : Understanding the Problem of Public Goods and Why Governments Fail Them Khemani, Stuti PUBLIC GOODS POLITICAL ECONOMY INSTITUTIONS NORMS PREFERENCES This paper brings the economic tools of demand and supply curves to better understand how political markets shape the selection of government policies. It does so to tackle a problem at the intersection of political science and economics: government failure to pursue policies on the basis of sound technical evidence. Too often, the leaders who wield policy-making power within governments deliberately and knowingly ignore sound technical advice, or are unable to pursue it despite the best of intentions, because of political constraints. The paper shows how the prevailing dominant explanation for suboptimal policies and weak institutions, of special interest and elite capture, can be understood as the selection of a point on the political demand curve by oligopolistic political competition. Further, it shows how elite capture is only one of many possible outcomes, and is endogenous to preferences and beliefs in society. Preferences in society for public goods (or the lack thereof), and beliefs about how others are behaving in the public sector, are the primitive or fundamental elements driving the shapes of political demand and supply curves and thence the selection of public policies and institutions. This framework highlights the need for future research to understand where political preferences and beliefs come from, which is essential to the design of institutions that address problems of public goods. 2017-10-20T21:18:50Z 2017-10-20T21:18:50Z 2017-10 Working Paper http://documents.worldbank.org/curated/en/688181507656703024/Demand-and-supply-curves-in-political-markets-understanding-the-problem-of-public-goods-and-why-governments-fail-them http://hdl.handle.net/10986/28548 English en_US Policy Research Working Paper;No. 8213 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
PUBLIC GOODS POLITICAL ECONOMY INSTITUTIONS NORMS PREFERENCES |
| spellingShingle |
PUBLIC GOODS POLITICAL ECONOMY INSTITUTIONS NORMS PREFERENCES Khemani, Stuti Demand and Supply Curves in Political Markets : Understanding the Problem of Public Goods and Why Governments Fail Them |
| relation |
Policy Research Working Paper;No. 8213 |
| description |
This paper brings the economic tools of
demand and supply curves to better understand how political
markets shape the selection of government policies. It does
so to tackle a problem at the intersection of political
science and economics: government failure to pursue policies
on the basis of sound technical evidence. Too often, the
leaders who wield policy-making power within governments
deliberately and knowingly ignore sound technical advice, or
are unable to pursue it despite the best of intentions,
because of political constraints. The paper shows how the
prevailing dominant explanation for suboptimal policies and
weak institutions, of special interest and elite capture,
can be understood as the selection of a point on the
political demand curve by oligopolistic political
competition. Further, it shows how elite capture is only one
of many possible outcomes, and is endogenous to preferences
and beliefs in society. Preferences in society for public
goods (or the lack thereof), and beliefs about how others
are behaving in the public sector, are the primitive or
fundamental elements driving the shapes of political demand
and supply curves and thence the selection of public
policies and institutions. This framework highlights the
need for future research to understand where political
preferences and beliefs come from, which is essential to the
design of institutions that address problems of public goods. |
| format |
Working Paper |
| author |
Khemani, Stuti |
| author_facet |
Khemani, Stuti |
| author_sort |
Khemani, Stuti |
| title |
Demand and Supply Curves in Political Markets : Understanding the Problem of Public Goods and Why Governments Fail Them |
| title_short |
Demand and Supply Curves in Political Markets : Understanding the Problem of Public Goods and Why Governments Fail Them |
| title_full |
Demand and Supply Curves in Political Markets : Understanding the Problem of Public Goods and Why Governments Fail Them |
| title_fullStr |
Demand and Supply Curves in Political Markets : Understanding the Problem of Public Goods and Why Governments Fail Them |
| title_full_unstemmed |
Demand and Supply Curves in Political Markets : Understanding the Problem of Public Goods and Why Governments Fail Them |
| title_sort |
demand and supply curves in political markets : understanding the problem of public goods and why governments fail them |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/688181507656703024/Demand-and-supply-curves-in-political-markets-understanding-the-problem-of-public-goods-and-why-governments-fail-them http://hdl.handle.net/10986/28548 |
| _version_ |
1764467118968930304 |