Legislative Bargaining with Heterogeneously Productive/Destructive Legislators

Abstract

We study a legislative bargaining game which departs from the canonical Baron and Ferejohn model (1989) only in that some legislators can affect the amount of resources to be distributed. These active legislators increase the size of the pie if included in the winning coalition (cooperators) or decrease it if excluded (saboteurs). We show that the presence of active legislators can produce two qualitatively different kinds of inefficiency. First, the proposer may exclude some active districts from her coalition in order to get a greater share of a smaller pie (size-inefficiency). Second, the proposer may randomly replace some active legislators by passive ones in a minimal-winning coalition (composition inefficiency). The intuition for the latter kind of inefficiency is that active legislators are more costly to include in the winning coalition, so replacing them randomly by passive ones induces a fear of being excluded from tomorrow's coalition that reduces the compensation they require for approving a proposal today. We characterize the conditions on the voting rule, teh amount of ressources to be distributed, and the proportion of cooperators and saboteurs under which either kind of inefficiency occurs in equilibrium.