The Three As of Government Formation: Appointment, Allocation, and Assignment

How does the Prime Minister organize her government so that she can implement her policy agenda? In our model, a Prime Minister appoints individuals to her cabinet, allocates their portfolios, and assigns their policy tasks—that is, she decides the relevant jurisdiction of departments and the type of proposals a minister can make. Upon appointment, ministers obtain expertise on policies specific to their jurisdiction and strategically communicate this information to the Prime Minister before a policy is implemented. Assignment allows the Prime Minister to implement her agenda even when she is constrained to appoint ministers whose policy preferences are far from her own. A Prime Minister weakly prefers a diverse cabinet. In equilibrium, the Prime Minister is indifferent between delegating policy or implementing policy herself.