Imagine a political elite confronting the prospect of social unrest. Somehow, politically disadvantaged groups have managed to overcome collective action obstacles to pose a threat. In principle, the elite could promise policy reform of some sort, for example an improvement in working conditions or housing or the distribution of land. They might well deliver on the promise initially, for to fail to do so would provoke the social unrest they currently fear. But once the conditions of unrest have dissolved, or the obstacles to collective action have re-emerged, it is possible for this elite to renege on its promises. That is to say, if the favourable conditions under which politically disadvantaged groups can mobilize are transitory, then promises from the elite that extend beyond the period in which those conditions are expected to hold are not credible. In order to be credible the promise has to take a more durable form, one difficult for the elite to reverse. Acemoglu and Robinson suggest that franchise extension possesses this greater durability – it is more difficult to reverse than, say, a land reform that can be undone.

Altruists, Egoists, and Hooligans in a Local Interaction Model Ilan Eshel; Larry Samuelson; Avner Shaked

American Economic Review 1998 88:157-179

The groupwith positive savings increased steadily after 1840 in the rural sector.

Lowergroups benefited during the early stages of the industrial revolution.

Jorbergstresses the rise in agricultural yield after 1830

A government report issued in 1863also stressed the rise in canal traffic and an increase in the number ofsavings banks.

“Both thedestitute and the rich decreased in significance in the nineteenth century.Equality appears to have increased” (p. 53)

We present results from a novel experiment on the effect of a policydesigned to encourage cooperation in a prisoner’s dilemma game. We find that the effect of this policy on the level of cooperation is greater when it was chosen democratically by the subjects than when it was exogenously imposed. This difference remains after controlling for selection (those thatchoose the policy may be more likely to be affected by it). We conclude that the treatment effect of policies may depend on whether they are endogenous or exogenous to the society on which they are imposed. Therefore,democratic institutions may have an effect on behavior in addition to the effect in terms of policy choice. More generally, our findings have implications for empirical studies of treatment effects in other contexts: the effect of a treatment may depend on whether it is endogenous or exogenous.

“A set of rules, compliance procedures, and moral and ethical behavioral norms designed to constrain the behavior of individuals in the interests of maximizing the wealth or utility of principals” (p. 201)