Abstract:

Good government requires some restraints on the powerful but how can those be imposed if there is no-one above them? This article studies the equilibrium allocation of power and resources established by self-interested incumbents under the threat of rebellions from inside and outside the group in power. Commitment to uphold individuals’ rights can only be achieved if power is not as concentrated as incumbents would like it to be, ex post. Power sharing endogenously enables incumbents to commit to otherwise time-inconsistent laws by ensuring more people receive rents under the status quo and thus want to defend it. © 2016 Royal Economic Society