
doi: 10.2139/ssrn.6895438
Why do formal democratic institutions frequently fail to discipline corrupt politicians, allowing systemic rent-seeking to persist despite regular elections? This article develops a gametheoretic model to explain how state capture persists as an endogenous institutional trap. Integrating probabilistic voting and rational ignorance, we demonstrate how "institutional awareness" acts as an underlying constraint on electoral accountability. Through this framework, we make three primary contributions to constitutional political economy. First, we show that democratic accountability is not guaranteed by the formal rules of elections alone; it requires a critical mass of public information to function. Second, we demonstrate that when an elite's capacity for information manipulation interacts with a politician's rent-seeking, the political system can fall into a self-reinforcing "middle-awareness trap." In this stable equilibrium, gradual reforms are ineffective, and escaping systemic capture requires a discontinuous institutional shock. Finally, we provide a formal proof that this capture equilibrium acts as a negative-sum outcome that rational agents sustain under existing electoral rules, destroying social surplus to obscure private rents. Ultimately, the model explains how the structural manipulation of information can neutralize the formal constitutional mechanisms of democracy.
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