Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/57637
Authors: 
Naqvi, Nadeem
Neumärker, Bernhard
Pech, Gerald
Year of Publication: 
2012
Series/Report no.: 
The Constitutional Economics Network Working Papers 01-2012
Abstract: 
Why do rulers play by the rules? We show that the legality requirement under the rule of law implements an endogenous enforcement mechanism supporting constitutionality. Agents which do not obey unconstitutional legal norms are not sanctioned under constitutional rule. A principal who defects from the constitution but cannot commit himself to never reinstall the constitution finds law enforcement more difficult. As more agents disobey, enforcement becomes less effective. The expectation of an eventual return to constitutionality becomes self-fulfilling. We show this mechanism to be effective in deterring a government from violating constitutional norms.
Subjects: 
constitution
dynamic policy constraints
tax evasion
global games
JEL: 
D78
K10
K42
H26
Document Type: 
Working Paper

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