Chapter

The Complete Contract Approach to Constitutional Design

Jean‐Jacques Laffont

in Incentives and Political Economy

Published in print October 2001 | ISBN: 9780199248681
Published online November 2003 | e-ISBN: 9780191596575 | DOI: http://dx.doi.org/10.1093/0199248680.003.0002

Series: Clarendon Lectures in Economics

 The Complete Contract Approach to Constitutional Design

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This chapter introduces a simple supervision model based on Tirole's methodology in which the Constitution has to be designed, given the need for informed politicians who act as supervisors. It is shown how an optimal Constitution will have to create incentives so as to avoid the capture of politicians by interest groups. Also, improved supervision is shown to increase welfare and decrease corruption.

Keywords: capture; constitutional design; corruption; incentives; interest groups; supervision; Jean Tirole; welfare

Chapter.  10490 words.  Illustrated.

Subjects: Microeconomics

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