by Salvatore Nunnari
Many voting bodies grant one or several of their members a veto right, that is, the right to block decisions even when a proposal has secured the necessary majority. The existence of veto power raises two concerns: first, it increases the possibility of status quo inertia; second, although it only grants the power to block decisions, it could allow veto members to impose their ideal decision on the rest of the committee. While these concerns have been investigated from the perspective of ad hoc committees, which bargain on a single policy, most committees are standing and bargain over a sequence of policies while an endogenous status quo is in place. In this paper, I present the results of a laboratory experiment designed to study the consequences of veto power in these committees. I show that (i) non-veto players are substantially less willing to support the expropriation of other non-veto players when dynamic incentives are strong and (ii) veto power substantially reduces proposal power; nonetheless, (iii) the allocation to the veto player displays a ratchet effect, and (iv) committees with a veto player have more status quo inertia and inequality of outcomes than committees without a veto player. I relate these results to the theoretical literature on the impact of veto power in standing committees.
JEL Classiffications: C72, C73, C78, C92, D71, D72, D78
Keywords: Legislative Bargaining; Endogenous Status Quo; Veto Power; Laboratory Experiments; Status Quo Inertia; Policy Capture; Redistribution; Inequality