Capture by Threat

  title={Capture by Threat},
  author={Ernesto DAL B{\'O} and Rafael Di Tella},
  journal={Journal of Political Economy},
  pages={1123 - 1154}
We analyze a simple stochastic environment in which policy makers can be threatened by “nasty” interest groups. In the absence of these groups, the policy maker’s desire for reelection guarantees that good policies are implemented for every realization of the shock. When pressure groups can harass the policy maker, good policies will be chosen for only a subset of states of nature. Hence, honest and able leaders might implement bad policies, and needed reforms could be delayed. In order to make…