EDITOR’S PROOF
Stable Constitutions in Political Transition 79
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Fig. 1 Optimum constitution
whenLis expected to
negotiate withMover reform
andwM>w
B&W IN PRINT
selectx∈[xM,xL]as close as possible toxR. The two negotiators will necessarily
propose the default outcomecto each other. Naturally, also in the case where the op-
timal constitution involvest∗=0, writing the constitution offers positive monetary
value to the autocrat becauset^0 >0.
Proposition 5In the static model withLandMas bargainers andwM>w,the
autocrat strictly prefers handing down a constitution.The monetary value of hand-
ing down a constitution is strictly positive.
ProofSee discussion above.
3.1.2 CasewM≤w
Next suppose thatMhas less than average effective wealth and, therefore, agrees
withLon the ideal tax rate oft=1. In that case which is illustrated in Fig.2, nego-
tiations betweenLandMwill result in the maximum level of redistribution which
does not violateR’s participation constraint, i.e. the tax rate ist=t^0 , indepen-
dently of the status quo constitution. ToR, who lexicographically prefers wealth,
the monetary value of writing a constitution is zero yet he would still like to write
a constitution in order to satisfy his policy preference with ideal pointxR. If writ-
ing a constitution is costly in terms of wealth, the autocrat prefers not to write a
constitution.
Proposition 6In the static model withLandMas bargainers andwM≤w,a
constitution affects only policy but does not affect post transition wealth.Hence the
monetary value of writing a constitution to the autocrat is zero.
ProofSee discussion above.
