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Scholars argue that electoral uncertainty is a crucial factor that influences policy implementation: current holders of public authority, nervous that they might lose their position, seek to insulate the agencies they create so that policies will survive their creators. These theories, however, ignore crucial variation in the electoral prospects of groups competing for public authority. In this paper, I examine the effect of electoral volatility on the degree to which groups in power will dismantle their opponent's agencies and programs and insulate their own policies from such destructive behavior. Through the analysis of two repeated games, I derive four propositions which fully characterize the conditions under which cooperative behavior can provide stability in the face of electoral uncertainty and instability. First, I show that if gains from cooperation are sufficiently large, compromise and cooperation can occur in the face of uncertainty. Second, I show that electoral uncertainty increases the possibility of cooperation, a result counter to the informal literature. Third, when electoral uncertainty is low, only one group—that with a low probability of electoral success—will insulate their programs. Finally, as electoral uncertainty increases, a wider set of the parameter values support the extreme cases of either both insulating or not insulating. I conclude by discussing some implications, examples and potential further extensions of the models.

Forty-three of the fifty states of the United States have granted item veto authority to their governors as part of state constitutions. In this paper, I test four explanations of why and when a legislature would cede institutional power. Using data from 1865 to 1994, I show that these measures are most likely proposed by fiscal conservatives who fear the loss of power in the future; in order to protect their interests for those periods when they will be in the minority, therefore, they seek to obtain institutions such as the item veto which will limit future, liberal legislatures. The results therefore shed light on two important substantive areas. First, by endogenizing budgetary institutions, it clarifies that they are not necessarily adopted for economic efficiency. Second, it provides evidence in support of theories which have posited that electorally weak groups will heavily 'insulate' policies in periods in which they momentarily hold power (e.g. Moe 1989, de Figueiredo 2000.

Rational choice theorists have long been ambivalent about the rationality postulate. Although many agree that humans have imperfect foresight & inaccurate understandings of the world within which they act, no satisfactory approach relaxing the rationality postulates exists. In this article, we apply a new method that allows us to model directly rational action when agents have incomplete or inaccurate mental models of their world. In particular, we utilize the game theoretic notion of self-confirming equilibrium. The self-confirming equilibrium framework allows us to model an environment where a player's predictions about one another's behavior are inaccurate. It also allows us to model a common aspect of disputes; viz., that both sides believe they are acting reasonably while the other side is acting unreasonably. Finally, the approach allows a type of surprise in which a player's mis-conjectures about another's behavior results in behavior that was not anticipated. We apply this framework to the problem of the American Revolution, helping to resolve several unexplained puzzles in the historical literature. Historians of the Revolution emphasize the role of ideas in underpinning the revolutionary crisis. From the rational choice standpoint, a critical omission in the literature is that historians do not connect the realm of ideas with the realm of action. We demonstrate how the framework we propose can more directly shed light on three aspects absent in the existing literature. First, to explain why either side fought about abstract ideals or how those ideals were connected to the realm of action, & thus why the two sides failed to come to some accommodation despite their differences. Second, to explain why the colonists became so incensed over seemingly trivial taxes imposed by the British after the Seven Years' War ended in 1763. &, finally, to explain that if the clash of fundamental ideals led the two sides to armed conflict, how the British & the Americans could be unaware of their profound differences during the previous 100 plus years of cooperation. Figures, References. [Reprinted by permission of Sage Publications Ltd., copyright 2006.]