How An Agenda Setter Induces Legislators to Adopt Policies They Oppose

This paper addresses the puzzle of why redistributive legislation, which benefits a small minority, may pass with overwhelming majorities. It models a legislature in which the same agenda setter serves for two periods, showing how he can exploit a legislature (completely) in the first period by promising future benefits to legislators who support him. In equilibrium, a large majority of legislators vote for the first-period proposal because they thereby maintain the chance of belonging to the minimum winning coalition in the future. Legislators may therefore approve policies by large majorities, or even unanimously, that benefit few, or even none, of them. The results are robust: some institutional arrangements, such as supermajority rules or sequential voting, limit but do not eliminate the agenda setter’s power to exploit the legislature; other institutions such as secret voting do not limit his power. ∗We thank seminar audiences at the Tinbergen Institute in Rotterdam and at the Universitat Rovira i Virgili for helpful discussions and suggestions. The usual disclaimer applies. Dahm acknowledges the support of the Barcelona Graduate School of Economics, of the Government of Catalonia, and of the Government of Spain under projects SEJ2007-67580-C02-01 and ECO2010-19733. †Department d’Economia and CREIP, Universitat Rovira i Virgili, Av. de la Universitat 1, 43204 Reus, Spain. [email protected] ‡Department of Economics, University of California, Irvine, CA 92697 USA. [email protected]