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Identifiers

doi
10.1596/1813-9450-8213
handle
10986/28548

Demand and Supply Curves in Political Markets : Understanding the Problem of Public Goods and Why Governments Fail Them

Flag for IGO World Bank on October 20th 2017
Khemani, Stuti
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 othe...

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Related SDGs

SDG 16: Peace, Justice and Strong Institutions ...
SDG 16: Peace, Justice and Strong Institutions

Target 16.6

Develop effective, accountable and transparent institutions at all levels

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Citations

Cited by 4 other policy documents (3 of them are from other policy sources)
 

Recognized names mentioned in this document

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James P. Walsh at International Monetary Fund
On page 49 (or quick view this section)
Masayuki Kudamatsu at London School of Economics and Political Science
On page 50 (or quick view this section)
Elhanan Helpman at Massachusetts Institute of Technology
On page 50 (or quick view this section)
David Coady at International Monetary Fund
On page 49 (or quick view this section)
Adil Mohommad at International Monetary Fund
On page 49 (or quick view this section)
Sanjeev Gupta at International Monetary Fund
On page 51 (or quick view this section)
David Coady at International Monetary Fund
On page 51 (or quick view this section)