Democracy’s Burning Ships
According to legend, Hernán Cortés, in his quest to conquer Mexico, burned the boats that had brought his expedition from Spain in order to motivate his soldiers to win. But when elected governments try to adopt a similar "commitment" strategy to enhance long-term economic outcomes, they risk losing democratic legitimacy.
CHICAGO – Since the late 1970’s, the academic diffusion of game theory has led macroeconomists to emphasize the importance of “commitment,” a strategy that aims to enhance long-term economic outcomes by restricting policymakers’ discretion. The idea seems counterintuitive: How can less produce more?
CHICAGO – Since the late 1970’s, the academic diffusion of game theory has led macroeconomists to emphasize the importance of “commitment,” a strategy that aims to enhance long-term economic outcomes by restricting policymakers’ discretion. The idea seems counterintuitive: How can less produce more?