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Applied and bridge studies study record
Environment, climate & resourcesThe Institutional Demand Lock-In Theorem: Why Captive Markets Resist Reform
STATUS · Manuscript in progressSSRN · Not yet posted
MECHANISM
Identify the incentive structure and the condition that would falsify the claim.
RULE CHANGE
Read the intervention only after the paper shows how the current payoff space fails to support system welfare.
READER USE
Use the summary to see where private gain creates system exposure, then check the study record.
Contribution — what this adds to the conversation
Provides a formal theorem with proof, Monte Carlo simulation, and four detailed case studies. Connects to existing canon (MST, Fiscal Capture) and offers a clear escape condition.
WHAT'S NEW · Formalizes a novel mechanism (institutional demand lock-in) distinct from regulatory capture, fiscal capture, and path dependence. Introduces dependency ratio δ and threshold δ*.
The Institutional Demand Lock-In Theorem explains why welfare-destroying activities resist reform even when the welfare case is overwhelming. When a decisive constituency's income depends on the harmful activity, reform becomes arithmetically impossible within democratic constraints. The theorem identifies a dependency ratio threshold δ* ∈ [0.15, 0.35] beyond which no reform coalition can form. Calibrated across private prisons, Amazon deforestation, gambling, and fast fashion, the paper proves that substitution of income before restriction is the only viable escape.