Institutional Equilibrium and Equilibrium Institutions

Abstract

"This theme paper focuses on political institutions and their effects on social choice. Institutions are argued to play a mediating role between the preferences of individuals and social choices. In addition to playing an endogenous role in molding and channeling preferences, institutions prescribe and constrain the set of choosing agents, the manner in which their preferences may be revealed, the alternatives over which preferences are expressed, the order in which such expressions occur, and generally the way in which business is conducted. The paper surveys the relationship between institutional arrangements and equilibrium outcomes in order to assess the importance of institutions for final outcomes. In so doing, we will have some perspective on the degree to which the traditional multidimensional voting model—institution-free and highly atomistic-- is an extreme case. Since institutions are not carved in granite, and are themselves the object of choices, it is important to take the next step of determining the durability of institutional arrangements or, on the other hand, the ways they adapt and evolve or atrophy. This will be the subject of the later part of this paper."