Insulation thresholds determine whether leaders can pass reforms or expropriate

Evidence

Whether good or bad, a new reform can be blocked by a (super) majority M of individuals, once the aggregate shock on preferences “a” is realized. We define M the “degree of insulation”: if M is high, only a large majority of voters can block the reform. On the contrary, a low M means that when in office the leader is checked by a large fraction of the electorate. Thus a leader passes a reform only if a fraction (1 −M) of the population favors it or can expropriate only if (1 −M) of the population does not object to this policy. — Philippe Aghion, Alberto Alesina, and Francesco Trebbi, Endogenous Political Institutions, 30

Categorization

• DEFINE: Defines ‘degree of insulation’ M as the blocking majority threshold, an inverse measure of how strongly a leader is checked by the electorate.
• XREF: Connects to political economy literature on veto players and supermajority constraints (e.g. Tsebelis on veto players, Acemoglu-Robinson on de facto vs de jure power).