Dynamics of Policymaking: Stepping Back to Leap Forward, Stepping Forward to Keep Back

We study dynamic policymaking when today's policy agreement becomes tomorrow's status quo, agents account for the consequences of today's policies for future policy outcomes, and there is uncertainty about who will hold future political power to propose and veto future policy changes. Today's agenda setter holds back from fully exploiting present opportunities to move policy toward her ideal point whenever future proposer and veto players are likely to be aligned either in favor of reform or against it. Otherwise, agenda setters advance their short-run interests. Optimal proposals can vary discontinuously and nonmonotonically with political fundamentals.